THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 
RIVERSIDE 


/ur&wV    <t.  Kqm^uS^ 


MUNICIPAL   OWNERSHIP  IN  GREAT 
BRITAIN 


*&%& 


MUNICIPAL   OWNERSHIP 

IN  GREAT  BRITAIN 


BY 

HUGO    RICHARD   MEYER 
*  *  t 

SOMETIME  ASSISTANT  PROFESSOR  OF  POLITICAL  ECONOMY 

IN  THE  UNIVERSITY  OF  CHICAGO 

AUTHOR  OF  "  GOVERNMENT  REGULATION  OF  RAILWAY  RATES " 


THE    MACMILLAN    COMPANY 

LONDON :   MACMILLAN  &  CO.,  Ltd. 
1906 

All  rights  reserved 


A]  4  f 


Copyright,  1906, 
By  THE  MACMILLAN  COMPANY. 

Set  up  and  elcctrotyped.    Published  April,  1906. 


yprtocoti  IBrnsj 

J.  8.  Cashing  A  Co.  —  Berwick  A  8mith  Co. 

Norwood,  Mass.,  U.S.A. 


TO  MY  SISTER 


PREFACE 

This  book  is  the  second  of  a  series  of  four 
books  which  will  give  the  results  of  the  au- 
thor's examination  of  the  actual  working,  in 
important  instances,  of  the  public  regulation  and 
the  government  ownership  and  operation  of  the 
so-called  public  service  industries:  the  railway, 
the  telegraph,  the  street  railway,  the  electric 
light,  the  electric  power  plant,  and  the  telephone. 
The  investigations  in  question  have  been  carried 
on  since  the  fall  of  1892,  and  they  have  covered 
the  United  States,  Great  Britain,  Germany,  and 
Australia.  The  books  embodying  the  results  of 
the  investigations  will  follow  each  other  in  quick 
succession.  But  that  does  not  mean  that  they 
are  in  any  way  hasty  productions.  It  has  been 
the  author's  policy  to  delay  publication  until  he 
had  covered  the  entire  field,  because  he  desired 
to  put  at  the  disposal  of  the  public  the  means 
of  comparing  the  experience  of  several  countries 
in  the  various  kinds  of  experiments,  without  long 
intervals  between  the  successive  books  setting 
forth  that  experience. 


CONTENTS 


CHAPTER   I 

TiG* 

Introduction i 

Special  value  of  Great  Britain's  experiments.  British 
inventiveness  in  check  since  1870. 

CHAPTER  II 

The  Tramways  Act,  1870 7 

Attempts  to  build  street  railways  in  the  sixties.  The 
Act  of  1870  leaves  control  with  the  municipalities.  Street 
railway  building  paralyzed.  Conditions  which  destroyed 
private  initiative.  Failure  of  attempts  to  limit  veto  power 
of  municipalities.  Burdens  placed  upon  street  railways. 
Standing  Order  No.  22  extends  municipal  veto  to  private 
charters.  The  bureaucrat  versus  the  men  of  affairs.  The 
cable  system,  like  steam,  not  used  on  British  tramways. 
Reasons  for  failure  to  develop  electric  tramways. 

CHAPTER   III 

The  Light  Railways  Act,  1896 68 

Administration  of  Act  represses  initiative  in  building 
tramways.  Power  of  the  municipal  organizations.  Science 
and  industry  no  match  for  politics. 

CHAPTER  IV 

The  United  Kingdom's  Lack  of  Street  Railways        .      87 
Comparison  of  the  street  railway  facilities  of  cities  of 
various  sizes  in  the  United  Kingdom  and  in  the  United 
States. 

ix 


X  CONTENTS 

CHAPTER  V 

PACE 

Glasgow 93 

City  assumes  operation  of  tramways  in  1893,  using  horse 
power.  Glasgow  opposes  perpetual  franchises  —  except 
for  itself.     Contrasts  between  promises  and  achievements. 

CHAPTER  VI 

Glasgow  proves  that  Graded  Fares  mean  Congestion 

of  Population 103 

Statistical  analysis  of  system  of  graded  fares.  Decen- 
tralization prevented  by  graded  fares.  Wage-earners  get 
little  benefit. 

CHAPTER  VII 

Edinburgh 117 

The  tramways,  under  private  management,  favor  work- 
ing classes.  Development  retarded  by  opposition  of  city. 
Company,  discouraged,  sells  plant  to  city.  Unbusinesslike 
management  by  municipality. 

CHAPTER  VIII 

Birmingham 131 

Building  of  street  railways  discouraged.  Lack  of  transit 
facilities  and  overcrowding. 

CHAPTER   IX 
Manchester,  Leeds,  Liverpool,  Sheffield,  and  Bristol    136 

CHAPTER  X 

Greater  London 141 

Local  and  class  interests  check  development  of  tram- 
ways. Parliamentary  committee  of  1872.  Recent  oppo- 
sition to  tramways  by  private  interests.     Misuse  of  veto 


CONTENTS  xi 

TAGS 

power  by  boroughs  and  county  council.  Inadequacy  of 
tramway  service.  Overcrowding  perpetuated.  Public 
necessity  versus  municipal  gain. 

CHAPTER  XI 

The  Municipal  Purchases  of  Company  Gas  Plants      .    172 
Sales    of   plants    by    companies    usually   compulsory. 
Municipalities  profit  from  initiative  of  companies. 

CHAPTER  XII 

The  Electric  Lighting  Act,  1882 184 

Board  of  Trade  misjudges  situation.  Opposition  to 
long  franchises.     Development  checked. 

CHAPTER   XIII 

Back  to  the  Dark  Ages 200 

Attempts  to  liberalize  the  Electric  Lighting  Act.  A 
study  of  the  bureaucratic  mind.  Blighting  effect  of  the 
Act  of  1882.  Progress  not  worth  its  cost.  Amendments 
abandoned. 

CHAPTER   XIV 

The  Cities  confess  their  Incompetence  to  take  hold 

of  a  New  Industry 221 

Report  of  Birmingham  Committee  of  1882.  The  value 
of  experiment  and  experience.  Summary  of  the  history 
of  the  acquirement  of  electric  plants  by  Birmingham,  Liver- 
pool, Manchester,  Sheffield,  Leeds,  Nottingham,  Edin- 
burgh, and  Glasgow. 

CHAPTER  XV 

The  Municipalities  versus  the  Consumer  .  .  .241 
Act  of  1888  aimed  to  remove  prohibitive  restrictions. 
Municipal  policy  prevents  development.  Administrative 
discrimination  against  companies.  Municipal  "orders" 
for  "blocking"  purposes.  The  United  Kingdom  out- 
stripped by  the  United  States. 


xii  CONTENTS 


CHAPTER   XVI 

The  Municipalities  versus  the  Manufacturer  266 

Wholesale  supply  of  electricity  prevented.  Municipal 
opposition  to  progress.  Needs  of  the  manufacturers. 
The  appeal  to  prejudice.  Parliamentary  grant  rendered 
nugatory.  Board  of  Trade  sides  with  municipalities. 
Parliament  helpless  before  the  municipalities.  Financial 
weakness  of  municipal  undertakings. 

CHAPTER  XVII 

The  Municipalities  versus  the  Wage-earners     .        .    298 
British  electrical  industries  outstripped.      Loss  of  em- 
ployment  to  wage-earners.      Indirect   harm   to   British 
wage-earners. 

CHAPTER  XVIII 

The  Municipal  Employees 307 

Politics  and  wages.  Political  power  of  employees. 
Costliness  of  municipal  operations.  House  of  Commons 
under  civil  service  control. 

CHAPTER    XIX 

Conclusion 322 

Governments  rarely  can  reverse  their  steps.  Progress 
dependent  upon  freedom  in  the  United  States.  Govern- 
mental obstruction  to  progress.  Industrial  development 
due  to  individual  initiative. 

INDEX  .  333 


CHAPTER   I 

INTRODUCTION 

The  opinion  is  widely  held,  and  is  still  on  the 
increase,  that  the  so-called  municipal  public  service 
industries  which  make  use  of  the  public  streets 
differ  in  vital  respects  from  the  ordinary  trading  and 
manufacturing  industries.  It  is  said  that  they  should 
be  made  to  share  their  profits  v/ith  the  public,  as 
represented  by  the  municipality,  in  return  for  the 
franchises  which  bestow  upon  them  the  right  to 
make  use  of  the  streets,  as  well  as  confer  upon  them 
the  monopoly  of  the  right  to  supply.  It  is  urged 
that  the  public  should  collect  its  alleged  share  of 
the  profits  of  these  public  service  companies,  either 
by  selling  or  leasing  the  franchises,  instead  of 
giving  them  without  the  exaction  of  a  money  pay- 
ment, as  has  been  the  American  practice  in  the  past, 
or  by  subjecting  the  companies  to  special  taxation, 
such  as  is  not  imposed  upon  other  trading  and  manu- 
facturing ventures. 

It  is  also  more  or  less  widely  held  that  the  munici- 
pality should  supersede  the  private  company,  by 
assuming  the  ownership  and  the  conduct  of  the  so- 
called  public  service  industries.  As  has  already 
been  stated,  the  main  argument  advanced  for  these 


2         MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

opinions  is  that  the  profits  to  be  made  in  the  indus- 
tries that  depend  upon  the  right  to  use  the  streets 
belong  in  part  to  the  public  at  large,  as  the  owners 
of  the  streets.  Of  late,  however,  a  second  argument 
has  been  advanced  —  namely,  that  the  public  au- 
thorities, as  the  representatives  of  the  people,  are 
more  solicitous  of  the  comfort  and  welfare  of  the 
people  than  are  trading  companies,  and  that,  there- 
fore, they  alone  should  be  intrusted  with  the  con- 
duct of  these  public  service  industries  which  so  vitally 
concern  the  people.  This  last  argument  is  a  wide 
departure  from  the  spirit  and  belief  of  our  fore- 
fathers, who  were  distrustful  of  the  State  and  be- 
lieved that,  upon  the  whole  and  in  the  long  run,  the 
individual  or  company  in  pursuing  its  own  selfish 
interest  at  the  same  time  promoted  the  welfare  of 
the  community  at  large. 

Great  Britain  has,  since  1870,  applied  the  doctrine 
that  the  so-called  public  service  industries  differ  from 
ordinary  trading  and  manufacturing  ventures  to  all 
special  Value  of  of  the  industries  that  make  use  of  the 
Great  Britain's  streets  except  the  gas-lighting  indus- 
Experiments  ^  Therefore  the  experience  of 
Great  Britain  has  a  double  significance  for  us 
Americans.  It  is  the  experience  of  our  cousins,  who, 
like  ourselves,  have  grown  strong  under  "that  liberty 
which  is  the  nurse  of  all  great  wits"  as  well  as  of  all 
spirit  of  adventure.  It  is  furthermore  the  experience 
of  a  country  that  has  treated  one  of  the  public  service 


INTRODUCTION  3 

industries  as  if  it  differed  not  from  any  other  trading 
venture,  while  it  treated  all  the  other  public  service 
industries  as  if  they  were  things  apart,  to  be  sub- 
jected to  special  burdens  and  disabilities.  In  other 
words,  the  experience  of  Great  Britain  affords  us 
the  means  of  comparing  the  working  over  a  period 
of  thirty-five  years  of  the  two  policies  under  dis- 
cussion, and  of  ascertaining  which  policy  has  the 
better  conserved  and  promoted  the  comfort  and 
happiness  of  the  individual,  as  well  as  the  prosperity 
of  the  State. 


Before  proceeding  to  the  consideration  of  the 
experience  of  Great  Britain,  it  is  well  to  remember 
that  Great  Britain's  traders,  manufacturers,  and 
capitalists  have  a  record  for  venturesome  invest- 
ment of  capital,  both  at  home  and  abroad,  that 
extends  over  centuries  and  as  yet  has  shown  no  signs 
of  abatement ;  that  in  the  engineering  trades  —  to 
which  the  so-called  public  service  industries  belong  — 
Great  Britain  is  second  to  no  other  country;*  that  in 
the  past  Great  Britain  has  taken  the  leading  position 
in  the  origination   and   introduction   of  the  steam 

*  The  Engineering  Magazine,  June,  1905. 


United  Kingdom,  1901 
United  States,  1902    . 


Number  of  Persons,  per 
10,000  of  Population, 
employed  in  the  engi- 
NEERING Trades 


301 
152 


Annual  Value  of  Engi- 
neering Exports,  per 
Worker,  in  the  Engi- 
neering Trades 


$223 
104 


4         MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

engine,  the  steamship,  the  railway,  gas  lighting,  and 
all  the  older  branches  of  engineering,  as  well  as  of 
the  earliest  great  electrical  application,  —  that  of  the 
electric  telegraph,  both  overland  and  submarine; 
that  the  earliest  electric  light,  that  of  the  arc,  was  dis- 
covered by  Sir  Humphry  Davy,  at  the  Royal 
Institution  in  Albemarle  Street ;  and  that  in  the  same 
laboratories  Faraday  made  those  fundamental  dis- 
coveries in  electro-magnetism  that  rendered  possible 
the  dynamo,  the  electromotor,  and  the  telephone. 
Again,  the  earliest  electric  accumulator  was  the  gas 
battery  of  Sir  William  Grove.  Varley  and  Wheat- 
stone  in  London  were  the  first  to  evolve  the  self-ex- 
citing dynamo  machine.  Swan  made,  and  exhibited 
at  Newcastle-on-Tyne,  the  earliest  incandescent  elec- 
tric lamp ;  and,  if  the  original  telephone  —  that  of 
Graham  Bell  —  was  an  American  invention,  the 
transmitting  instrument  of  to-day  is  in  large  measure 
based  on  the  microphonic  discoveries  made  in  Lon- 
don by  Professor  Hughes. 

"Nor  in  the  earlier  stages  of  practical  electrical 
engineering  was  this  country  [Great  Britain]  in 
arrear  of  other  nations.  At  a  time  when,  in  America 
and  elsewhere,  the  design  of  electric  generating 
machinery  was  in  an  entirely  empirical  condition, 
the  late  Dr.  Hopkinson  first  worked  out  the  correct 
underlying  principles  and  put  the  design  of  dynamo 
machinery  on  a  sure  scientific  basis.  One  of  the 
earliest   private    electric-light    installations    in    the 


INTRODUCTION  5 

world  was  that  of  Sir  William  Armstrong,  at  Crag- 
side,*  while  one  of  the  first  electric  railways  f  put 
down  for  practical  use  was  that  in  Ireland  between 
Portrush  and  the  Giant's  Causeway."  | 

The  reader  will  note  that  the  foregoing  discoveries 
and  achievements  relate  in  the  main  to  the  period 
preceding  the  year  1870.  On  the  other  hand,  the 
British  inventive-  electrical  industries  as  we  know  them 
ness  in  check  since  to-day  have,  in  the  main,  been  created 
1870  since    1870.    Writing   in   1901,    Mr. 

J.  A.  Fleming,  F.R.S.,  an  eminent  British  consulting 
electrical  engineer,  used  these  words  in  closing  a 
review  of  the  development  of  the  electrical  industries 
in  the  period  from  1870  to  1900:  — 

"In  reviewing  the  nationality  of  those  who  have 
thus  helped  to  make  the  electric  current  the  nimble 
servant  of  mankind,  it  is  impossible  not  to  be  struck 
with  the  fact  that  British  names  do  not  preponderate. 
In  the  region  of  pure  scientific  research,  in  the  de- 
velopment of  electrical  theory,  Great  Britain  has 
unquestionably  held  her  own  with  the  world.  In 
detailed  improvements  or  adaptations  we  have  not 
been  backward,  but  if  we  except  the  inventions  of 
Lord  Kelvin  in  connection  with  submarine    teleg- 

*The  machinery  was  driven  by  water-power,  and  the  current  was 
carried  a  distance  of  one  mile  to  Cragside,  in  1882.  The  plant  was 
designed  by  the  German  engineers,  Siemens  Bros.  &  Co.,  of  Berlin, 
London,  and  elsewhere. 

fin  1883.  The  current  was  taken  from  a  side-exposed  conductor 
rail.  The  system  was  retained  in  use  until  1898,  when  the  overhead 
system  was  installed. 

%  A.  A.  C.  Swinton :  Electrical  Engineering  and  the  Municipalities. 


6         MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

raphy,  Mr.  Swan  in  electric  lighting,  and  the  con- 
tribution which  the  late  Professor  D.  E.  Hughes 
made  to  telephony  by  the  invention  of  the  micro- 
phone, it  is  difficult  to  name  any  first-rate  new 
adaptation  of  electrical  discovery  for  practically 
useful  purposes  in  the  last  thirty  years  which  has 
not  come  to  us  first  from  non-British  sources.  It 
cannot  be  said  that  the  country  which  has  produced 
a  Watt,  a  Stephenson,  and  an  Arkwright  is  deficient 
in  mechanical  inventiveness,  but  it  is  impossible  to 
deny  that  the  period  of  time  since  1870  has  not  been 
marked  by  the  evolution  of  distinctly  novel  electrical 
inventive  ideas  proceeding  from  British  minds." 
The  writer  concludes  with  the  words :  — 
"The  matter  is  not  one  to  be  lightly  dismissed ;  the 
development  of  national  inventiveness  is  at  least  as 
important  in  the  world-struggle  of  nations  for  exist- 
ence as  the  preservation  of  national  physique.  We 
are  apt  to  consider  that  invention  is  the  result  of  the 
spontaneous  action  of  some  heaven-born  genius 
whose  advent  we  must  patiently  wait  for,  but  cannot 
artificially  produce.  It  is  unquestionable,  however, 
that  education,  legal  enactments,  and  general  social 
conditions  have  a  stupendous  influence  on  the 
development  of  the  originative  faculty  present  in 
a  nation,  and  determine  whether  it  shall  be  a  fountain 
of  new  ideas  or  become  simply  a  purchaser  from 
others  of  ready-made  inventions."  * 

*  The  Nineteenth  Century,  February,  1901. 


CHAPTER   II 

THE  TRAMWAYS  ACT,    1870 

In  1858,  the  leading  stockholders  in  the  General 
Omnibus  Co.,  of  London,  impressed  with  the  suc- 
cess of  the  street  railway  in  the  United  States,  asked 
Parliament  for  a  charter  for  street  railways  in  Lon- 
don. The  request  was  denied.  Sir  Benjamin  Hall, 
Chief  Commissioner  of  Works  for  Metropolitan 
London,  moved  the  rejection  of  the  Bill,  saying: 
"They  asked  for  power  to  appropriate  16  feet  in 
width  of  the  public  thoroughfares  of  the  metropolis, 
in  order  that  their  omnibuses  might  run  on  rails 
laid  for  that  purpose.  Now  as  some  of  the  public 
thoroughfares  were  only  18  feet  wide,  only  one  foot 
would  be  left  on  each  side  for  the  accommodation 
of  carriages,  carts,  and  all  the  ordinary  traffic.  It 
must  be  admitted  that  there  was  hardly  a  thorough- 
fare in  the  metropolis  at  present  sufficiently  large  to 
accommodate  the  existing  traffic,  and  he,  therefore, 
thought  it  a  monstrous  proposition  to  ask  permission 
to  appropriate  16  feet  of  a  highway  to  the  purposes 
of  a  private  omnibus  company."  * 

*  Hansard's  Parliamentary  Debates,  March  15,  1858,  p.  175. 
7 


8         MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

In  i860,  some  British  capitalists,  under  the  leader- 
ship of  an  American,  the  late  Mr.  George  Francis 
Train,  built  a  street  railway  in  Birkenhead,  a  suburb 
Attempts  to  build  of  Liverpool.  They  had  no  parlia- 
street  Railways  mentary  charter  *  but  acted  with  the 
in  the  Sixties  consent  of  the  local  authority — which , 
however,  had  no  lawful  right  to  grant  power  to  break 
up  the  streets  for  the  purpose  either  of  constructing 
or  of  repairing  street  railways.  The  opposition  of 
the  owners  of  pleasure  vehicles  and  of  the  proprie- 
tors of  retail  stores  was  persistent,  and  culminated, 
in  1865,  in  an  action  at  law,  which  asked  that  the 
tramways  be  condemned  as  a  nuisance.  But  the 
local  jury  before  whom  the  case  was  tried  found  that 
the  tramways  were  a  public  benefit,  not  a  nuisance.f 

On  April  16,  1861,  the  House  of  Commons  again 
rejected  an  application  for  a  charter  for  Metropolitan 
London ;  and  on  April  26,  it  negatived,  by  a  vote  of 
40  to  20,  a  motion  for  a  Select  Committee  "to  inquire 
into  the  propriety  of  establishing  a  mode  of  public 
conveyance  by  means  of  iron  rails  in  the  streets  and 
highways."  %  Baffled  in  their  parliamentary  efforts, 
Mr.  Train  and  his  British  supporters  laid  down  sev- 
eral lines  on  the  strength  of  mere  agreements  with 
several  of  the  local  authorities  forming  a  part  of 

*  Report  from  the  Select  Committee  on  Tramways  Bill,  1878,  q.  1252. 

t  Hansard's  Parliamentary  Debates,  March  3,  1896,  p.  546,  Captain 
Grosvenor. 

%  Ibid.,  April  16,  1861,  p.  639;  and  April  26,  p.  1155;  and  The 
Municipal  Journal,  January  22,  1904. 


THE   TRAMWAYS   ACT,   1870  9 

Metropolitan  London.  From  the  Marble  Arch 
along  Bayswater  Road,  from  Westminster  to  Vic- 
toria Station,  and  from  Westminster  Bridge  to 
Kensington  Park,  tramway  lines  were  opened;  but 
the  violence  of  the  ensuing  agitation  led  to  their 
hasty  removal. 

In  May,  1862,  Mr.  Ayrton,  a  private  member  of 
Parliament,  obtained  leave  to  bring  in  a  "Bill  to 
authorize  the  construction  of  tramways  on  turnpike 
roads  and  other  roads  in  England."  But  in  July 
he  abandoned  the  bill,  saying:  "He  hoped,  however, 
that  the  government  would  take  up  the  Bill  in  the 
next  session,  for  it  was  the  Government  alone  that 
could  combat  the  powerful  private  interests  which 
demanded  undue  concessions."  * 

In  1863,  Mr.  Train  and  his  supporters,  acting  once 
more  without  authority  from  Parliament,  laid  down 
a  tramway  between  Burslem  and  Hanley,  as  well  as 
one  at  Darlington.  In  1865  a  further  unsuccessful 
effort  was  made  to  obtain  charters  for  street  railways 
in  London  and  Liverpool.  In  1868  the  House  of 
Commons  threw  out  the  application  of  a  company 
that  desired  to  begin  by  building  tramways  in  26 
miles  of  street  in  London,f  but  at  the  same  time 
it  granted  charters  for  Liverpool,  and  Glastonbury 
and  Street.     In  1869  Parliament  sanctioned    three 

*  Hansard's  Parliamentary  Debates,  May  13,  1862,  p.  1619  and  fol- 
lowing;  June  3,  p.  1619;  and  July  23,  p.  701. 
t  Ibid.,  March  5,  1868,  p.  1109  and  following. 


10       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

street  railway  schemes  for  41  miles  of  street  in  the 
suburbs  of  Metropolitan  London ;  *  and  finally,  in 
1870,  it  enacted  a  general  act  providing  for  the  grant- 
ing of  charters  for  street  railways. 

In  the  meantime,  the  men  who  had  met  with 
rebuff  after  rebuff  from  Parliament,  nothing  daunted, 
had  turned  to  the  Continent;  and,  in  the  period  of 
1864  to  1 87 1,  they  had  built  street  railways  in  Copen- 
hagen, Brussels,  Paris,  Bordeaux,  Geneva,  Madrid, 
Genoa,  Vienna,  Berlin,  Barcelona,  St.  Petersburg, 
and  Constantinople. f  This  record  of  persistent 
appeals  to  Parliament,  of  repeated  building  of  street 
railways  in  Great  Britain  with  no  lawful  public 
authority  for  such  building,  and  of  building  street 
railways  on  the  Continent,  where  the  people  were 
much  poorer  than  in  England  and  were  therefore 
less  likely  to  ride  upon  the  tramways,  should  be 
sufficient  answer  to  the  misinformed  or  disin- 
genuous persons  who  are  in  the  habit  of  telling  us 
that  the  municipal  ownership  of  the  street  railways 
in  Great  Britain  had  its  origin  in  the  unwillingness 
of  private  enterprise  to  afford  adequate  transpor- 
tation facilities. 

In  March,  1870,  Mr.  Shaw-Lefevre,  Parliamentary 

*  Hansard's  Parliamentary  Debates,  March  3,  1869,  p.  543  and  fol- 
lowing;  and  May  13,  p.  735  and  following. 

t  Reports  respecting  Tramways  in  Foreign  Countries,  1872;  Further 
Reports  respecting  Tramways  in  Foreign  Countries,  1872.  Report  from 
the  Select  Committee  on  Tramways  BUI,  1870,  q.  947,  1141,  and  1218; 
and  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
q.  1452,  1457,  351,  356,  373,  and  370. 


THE   TRAMWAYS  ACT,   1870  H 

Secretary  to  the  Board  of  Trade,  moved  leave  to  bring 
in  the  Tramways  Bill,  1870  *  He  said :  "Honorable 
Members  must  be  aware  that  there  were  before  them 
numerous  Private  Bills  asking  powers  to  lay  down 
tramways  in  the  streets  of  our  principal  towns.  In 
all,  there  were  27  companies  asking  for  such  powers 
over  515  miles  of  road,  with  a  capital  of  $20,000,000. 
For  London  alone  there  were  seven  companies  seek- 
ing these  powers  over  125  miles  in  some  of  the  most 
important  streets ;  while  others  had  in  contemplation 
systems  of  tramways  for  Manchester,  Liverpool, 
Birmingham,  Leeds,  Glasgow,  Portsmouth,  and 
Plymouth.  Now,  previous  to  this  year,  as  far  as  he 
was  aware,  only  six  Private  Acts  had  been  passed 
authorizing  tramways.  Of  these,  three  companies 
had  obtained  powers  to  lay  down  and  work  tram- 
ways in  London  south  of  the  Thames,  .  .  .  and 
although  an  attempt  had  been  made  to  show  that 
the  Committee  (1869)  authorized  the  making  of 
these  tramways,  as  an  experiment,  he  was  assured 
by  his  honorable  Friend  (Mr.  Sclater-Booth,  Chair- 
man of  the  Select  Committee  of  1869)  that  that 
was  not  the  case,  that  the  Bills  were  passed  on  their 
own  merits,  and  under  the  full  belief,  founded  upon 
the  evidence,  that  they  would  be  a  success,  and 
would  be  a  great  convenience  to  the  public."  He  re- 
ferred to  the  evidence  before  the  Committee  (of  1869) 

*  Hansard's  Parliamentary  Debates,  March   1,   1870,  p.  1080  and 
following. 


12       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

as  to  the  working  of  tramways  laid  (by  Englishmen) 
upon  improved  principles  in  many  of  the  leading  cities 
of  Europe,  particularly  at  Berlin,  Vienna,  Brussels, 
Copenhagen,  Geneva,  and  said:  "The  evidence,  in- 
deed, seemed  to  him  to  establish  that  the  more 
crowded  a  street  was,  and  the  greater  the  traffic 
of  all  kinds,  the  more  useful  and  important  was 
the  tramway,  subject  only  to  this,  that  the  street  was 
wide  enough  to  afford  room  for  other  carriages 
to  pass  on  both  sides  of  the  tram.  Subject  to  that, 
the  tramway  appeared  to  have  the  effect  of  regulating 
the  traffic  by  sending  it  in  straight  lines,  and  by  afford- 
ing relief  to  all  those  vehicles  which,  although  not 
fitted  with  flange  wheels,  could  use  the  rails  with 
their  ordinary  wheels.  ...  He  believed  the  opposi- 
tion to  these  Bills  would  not  be  against  the  principle 
(of  tramways) ;  but  on  the  part  of  local  authorities 
to  the  effect  that  they  did  not  wish  to  part  with  the 
control  over  their  streets,  and  that  they  were  pre- 
pared themselves .  to  undertake  the  task  of  laying 
down  and  repairing  the  tramways  in  the  streets,  and 
of  letting  them  on  lease  to  private  omnibus  com- 
panies on  charging  tolls  for  the  use  of  them.  He 
had  received  deputations  during  the  last  few  days 
from  the  municipal  authorities  of  Manchester,  Leeds, 
Birmingham,  Salford,  and  Stockport,  to  that  effect, 
praying  that  they  might  be  allowed  the  opportunity 
of  making  tramways  themselves." 
The  charters  granted  in  1868  and  1869  had  con- 


THE   TRAMWAYS   ACT,    1870  13 

tained  clauses  giving  the  local  authorities  power  to 
purchase  the  street  railways  at  the  expiration  of  a 
specified  period  at  the  actual  value,  plus  30  per 
cent  for  good-will.*  Of  these  clauses  Mr.  Shaw- 
Lefevre  said:  "He  might  mention  here  that  the 
clause  for  purchase  under  the  Acts  of  1869  appeared 
to  him  to  be  so  drawn  as  really  to  make  it  impossible 
for  any  local  authority  to  carry  it  out.  They  in- 
cluded in  the  purchase  money  to  be  given  for  the 
undertaking  not  only  the  value  of  the  tramway,  but 
also  good-will,  and  prospective  profits  would  be 
excluded ;  the  local  authorities  would  have  the  right 
to  purchase  after  21  years,  on  payment  of  the  actual 
value  of  the  tramway  and  the  other  property  of  the 
company  necessary  for  working  the  same.  The 
only  question  which  could  arise  upon  this  was 
whether  capital  could  be  raised  upon  such  terms. 
He  could  not,  for  his  part,  doubt  that  it  would,  the 
more  so,  as  he  had  inserted  no  limitation  of  dividend 
in  the  interval,  and  no  compulsory  lowering  of  fares. 
.  .  .  Now,  although  the  Bill  would  give  power  to  local 
authorities  to  construct  tramways,  but  not,  of  course, 
to  work  them  —  yet  he  believed  that,  as  a  general 
rule,  they  might  look  forward  to  the  tramways  being 
constructed  rather  by  companies  than  by  municipal 
authorities ;  but  there  was  a  process  under  this  Bill, 
which  he  thought  might  with  advantage  be  resorted 

*  Report  from  the  Select  Committee  on  Tramways  BUI,  1870,  q.  11  n 
to  1133;  and  The  Municipal  Journal,  March  31,  1905. 


14       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

to  by  municipal  authorities  who  wished  to  have  the 
general  control  over  the  laying  down.  It  was  that 
which  would  enable  local  authorities  to  apply  to  the 
Board  of  Trade  for  a  certificate  for  tramways  upon  a 
general  system  within  their  district,  and,  having  ob- 
tained the  necessary  powers,  to  sell  or  lease  the  con- 
cession to  a  company  or  companies.  Under  this 
provision  a  corporation  *  would  have  the  power  to 
lay  down  a  general  plan  for  tramways,  and  then  to 
offer  it  as  a  whole  or  in  sections  to  competition.  The 
consent  of  the  Board  of  Trade  would  be  necessary 
for  any  such  transaction,  and  the  principle  to  be 
acted  upon  in  such  cases  appeared  to  him  not  that 
very  great  profits  should  be  made  for  the  ratepayers, 
but  that  the  public  should  gain  as  much  as  possible 
by  lowering  the  fares.  He  did  not  think  that  profit 
should  be  made  by  local  authorities  out  of  tramways 
at  the  expense  of  the  general  public,  for  whose  use  they 
were  intended,  and  more  good  was  to  be  arrived  at 
by  reducing  fares  than  by  reducing  the  local  rates 
(taxes).  This  was  the  principle  which  was  not  laid 
down  in  the  Bill,  but  would  be  left  to  the  Board  of 
Trade,  to  carry  out  in  its  application  of  the  Bill." 

Before  the  Select  Committee  to  which  the  Bill  was 
referred,  Mr.  John  Morris,  of  Ashurst,  Morris  &  Co., 
solicitors,  appeared  as  the  "selected  witness  of  the 
tramway    interests."     Mr.    Morris    himself    was    a 

*  Throughout  this  book  the  word  "corporation"  is  used  in  the  British 
sense,  —  that  is,  to  denote  a  city. 


THE   TRAMWAYS   ACT,   1870  15 

stockholder  in  the  tramways  of  Brussels,  Genoa, 
and  Copenhagen.  He  asked  that  the  clause  au- 
thorizing the  municipalities  to  purchase  at  the  end 
of  21  years  on  the  basis  of  "the  value  of  the 
tramway  estimated  as  a  constructed  work,  such 
value  to  be  in  case  of  difference  determined  by  an 
engineer  or  other  fit  person  nominated  as  referee 
by  the  Board  of  Trade"  be  changed  to  "actual 
structural  value,  plus  30  per  cent."  He  asked  for 
the  allowance  of  30  per  cent  on  the  ground  that 
21  years  would  not  always  be  a  sufficient  period  to 
allow  a  company  to  make  good  the  losses  incurred 
in  the  early  years ;  and  that  the  price  of  the  material 
used  in  building  a  tramway  might  decrease  very 
much  during  the  life  of  the  charter,  and  thus  make 
a  sale  on  the  basis  of  the  mere  value  of  the  material 
in  the  tramway  a  hardship*  Parliament  overruled 
this  request  of  the  men  who  for  twelve  years  had  been 
seeking  permission  to  build  street  railways  in  Great 
Britain,  and  had  carried  the  tramway  to  upward  of  a 
dozen  cities  on  the  Continent.  The  purchase  clause 
enacted,  read :  "upon  terms  of  paying  the  then  value 
(exclusive  of  any  allowance  for  past  or  future  profits 
of  the  undertaking,  or  any  compensation  for  com- 
pulsory sale,  or  other  consideration  whatsoever)  of 
the  tramways,  and  all  lands,  buildings,  .  .  ."  f 
When  Parliament  enacted  the  purchase  clause  put 

*  Report  jrom  the  Select  Committee  on  Tramways  Bill,  1870,  q.  mi  to 
1132,  and  1 198. 

t  33  and  34  Vict.  c.  78,  s.  43. 


16       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

forward  by  the  municipal  corporations,  rather  than 
the  purchase  clause  put  forward  by  the  men  who 
The  Act  of  1870  stood  ready  to  build  the  tramways, 
leaves  control  with  it  yielded  to  the  contention  of  the 
the  Municipalities  munic  jpaj  corporations,  that  the  profits 
derivable  from  industries  that  use  the  streets  should 
be  applied  to  the  reduction  of  the  taxes,  and 
should  not  be  permitted  to  flow  into  the  pockets  of 
"speculators."  That  contention,  or  doctrine,  was 
clearly  enunciated  in  1874  by  Mr.  Joseph  Chamber- 
lain, then  Mayor  of  Birmingham,  in  the  course  of 
his  speeches  in  support  of  his  proposal  that  Bir- 
mingham purchase  the  gas  plant  belonging  to  a  joint 
stock  company.  Before  a  Select  Committee  of  the 
House  of  Commons,  Mr.  Chamberlain,  as  a  witness, 
said :  "  It  is  with  the  object  of  diminishing  the  direct 
taxation  of  Birmingham  that  we  are  promoting  this 
Bill"  (to  acquire  the  gas  works).  In  the  Birming- 
ham Council,  he  said:  "All  these  duties  (street 
widenings  and  the  rebuilding  of  unsanitary  dis- 
tricts) involve  a  largely  increased  expenditure,  and 
I  believe  that  the  pressure  of  the  rates  will  become 
intolerable  unless  some  compensation  can  be  found 
by  some  proposal,  such  as  this  one  I  now  lay  before 
you.  *  .  .  .  When  the  purchase  of  the  Water  Works 
comes  before  you,  it  will  be  a  question  concerning 
the  health  of  the  town;   the  acquisition  of  the  Gas 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
E.  O.  Smith,  Town  Clerk  of  Birmingham,  q.  1894. 


THE   TRAMWAYS  ACT,   1870  17 

Works  concerns  the  profits  of  the  town  and  its 
financial  resources.  .  .  .  Both  are  matters  of  ab- 
solute public  necessity.  ...  I  distinctly  hold  that 
all  monopolies  which  are  sustained  in  any  way  by  the 
State  ought  to  be  in  the  representatives  of  the  peo- 
ple, by  the  representative  authority  should  they 
be  administered,  and  to  them  should  their  profits 
go,  and  not  to  private  speculators.  In  the  second 
place  ...  I  am  always  inclined  to  magnify  my 
office  (the  Mayoralty) :  I  am  inclined  to  increase 
the  duties  and  responsibilities  of  the  local  authority, 
in  whom  I  have  myself  so  great  a  confidence,  and 
will  do  anything  in  my  power  to  constitute  these 
local  authorities  real  local  Parliaments,  supreme  in 
their  special  jurisdiction."*  To  this  same  doctrine 
subscribed  also  the  Joint  Select  Committee  of  the 
House  of  Lords  and  the  House  of  Commons  on 
Tramways,  1872,  in  the  following  statement:  "We 
are  far  from  being  insensible  to  the  advantages  at- 
taching to  the  construction  of  tramways  by  an  au- 
thority having  entire  control  over  the  tramway  and 
roadway,  and  able  to  devote  the  profits  arising 
from  the  undertaking  to  the  relief  of  the  rates. 
We  think  it,  however,  premature  to  discuss  in 
any  detail  the  question  of  central  management 
of  Metropolitan  Tramways  by  a  municipal  author- 
ity which  has  yet  to  be  created,  though  we  are  of 

*  N.  M.  Morris:  Joseph  Chamberlain,  The  Man  and  the  Statesman, 
pp.  112  and  in. 


18       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

opinion  that  when  such  an  authority  is  established, 
every  facility  should  be  afforded  to  enable  it  to 
obtain  possession  of  the  tramways  by  purchase 
upon  fair  terms,  at  the  earliest  possible  period." 
And  finally,  one  may  cite  the  argument  made  in 
1869,  and  repeated  in  1871,  by  the  vestry  of  the 
Parish  of  St.  George,  Hanover  Square,  London, 
against  the  granting  of  street  railway  charters 
to  stock  companies.  "The  Metropolitan  Board  of 
Works  has  already  undertaken  two  great  works  — 
drainage  and  embankment  of  the  Thames  —  which, 
important  and  valuable  as  they  are,  have  resulted  in 
heavy  pecuniary  burdens  to  the  ratepayers  of  Lon- 
don. It  seems  then  only  fitting  that  the  carrying 
out  an  operation  such  as  the  construction  of  Tram- 
ways (which  promise  large  pecuniary  returns)  should 
also  be  placed  in  their  hands  for  the  benefit  of  the 
ratepayers."  * 

In  1870,  Mr.  Shaw-Lefevre  had  stated  that  27 
companies  were  asking  Parliament  for  charters 
covering  515  miles  of  street.  In  1880,  there  were 
street  Railway  m  the  entire  United  Kingdom  only 
Building  para-  386  miles  of  first  main  track  of  street 
railway.  In  that  same  year,  there 
were  in  the  United  States,  in  the  cities  of  50,000 
and   more  inhabitants,   no    less    than    1584    miles 

*  Report  of  Proceedings  of  the  Board  of  Trade  under  the  Tramways 
Act,  1870,  with  regard  to  the  Proposed  Tramways  in  and  about  the  Metrop- 
olis, May  3,  187 1 ;  and  Hansard's  Parliamentary  Debates,  March  3, 
1869,  p.  547. 


THE   TRAMWAYS   ACT,   1870  19 

of  first  main  track  of  street  railway  *  In  the 
United  States  there  were  living,  in  1880,  in  cities  of 
50,000  and  more  inhabitants,  8,700,000  people.  For 
England  and  Wales  the  corresponding  figure  was 
10,300,000  people.  Had  England  and  Wales  pos- 
sessed the  same  mileage  of  street  railway  as  the 
United  States,  in  proportion  to  its  population  living 
in  cities  of  50,000  and  more  inhabitants,  it  would 
have  had,  in  1880,  no  less  than  1875  miles  of  first 
main  track  of  street  railways.  This  comparison 
takes  no  account  of  the  466  miles  of  first  main  track 
in  the  United  States,  in  1880,  in  cities  of  less  than 
50,000  inhabitants. 

In  1890,  the  cities  of  the  United  States  having 
50,000  and  more  inhabitants  had  3205  miles  of  first 
main  track  of  street  railway.  Had  the  correspond- 
ing cities  of  England  and  Wales  had  a  proportionate 
mileage,  they  would  have  had  3190  miles  of  first 
main  track.  As  a  matter  of  fact,  England,  Wales, 
Scotland,  and  Ireland  had  an  aggregate  mileage  of 
948  miles  only.  This  comparison  again  takes  no 
account  of  the  2578  miles  of  first  main  track  in 
American  cities  of  less  than  50,000  inhabitants.  If 
the  latter  mileage  be  taken  into  account,  England  and 
Wales,  in  1890,  must  have  had  fully  5200  miles  of 
first  main  track  of  street  railway,  before  the  people 
of  England  and  Wales  could  have  been  said  to  be 

*  Report  on  Transportation  Business  in  the  United  States  at  the  Elev- 
enth Census,  1890,  Part  I. 


20       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

as  well  supplied  with  street  railway  facilities  as  were 
the  people  of  the  United  States. 

In  1890,  street  railway  building  for  the  time 
being  came  to  an  end  in  the  United  Kingdom.  In 
the  five  years  ending  with  1895,  there  were  opened 
in  the  United  Kingdom  only  34  miles  of  street  railway : 
horse,  cable,  and  electric* 

While  the  municipalities,  in  1870,  brought  press- 
ure to  bear  upon  Parliament  to  secure  the  enact- 
ment of  an  act  which  practically  paralyzed  street 
railway  building,  so  far  as  private  enterprise  was 
concerned,  they  did  not  themselves,  in  the  years 
following  1870,  step  in  to  fill  the  void  created  by  the 
paralysis  of  private  initiative.  In  1878,  the  mu- 
nicipalities had  built  only  45  miles  of  tramway ;  by 
1888,  they  had  built  only  236  miles;  and  by  1891, 
they  had  built  only  255  miles.  After  1892,  the 
municipalities  began  to  acquire  tramways  under  the 
purchase  clause  of  the  Tramways  Act  of  1870;  and 
in  1897,  they  began  to  build  a  little  more  freely.  At 
present  practically  all  street  railway  building  under 
the  Act  of  1870  is  carried  on  by  the  municipalities. 
Private  companies  build  almost  exclusively  under 
authority  obtained  under  the  Light  Railways  Act, 
1896,  which  measure  will  be  discussed  on  a  subse- 
quent page.  ,  At  the  close  of  1904,  the  local  authori- 
ties owned  11 48  miles  of  first  main  track  of  tramway; 
and  the  companies  owned  692  miles. 

*  Current  issues  of  the  annual  Return  relating  to  Street  and  Road 
Tramways,  etc.,  issued  by  the  Board  of  Trade. 


THE   TRAMWAYS   ACT,    1870  21 

In  justice  to  the  municipalities  it  should  be  added 
that  down  to  1896  Parliament  refused  to  give  the 
local  authorities  power  to  operate  street  railways, 
unless  they  should  become,  and  should  continue  to 
be,  unable  to  find  tenants  for  their  property.*  That 
disability  undoubtedly  acted  as  a  check  upon  mu- 
nicipal building;  but  it  does  not  account  for  the 
complete  failure  of  the  municipalities  to  fill  the  void 
created  by  the  paralysis  of  private  initiative.  The 
municipalities  have  invariably  failed  to  contribute 
to  the  establishment  of  a  new  industry,  or  to  the 
advancement  of  an  established  one.  That  has  been 
true  successively  of  water  works,  gas  works,  horse 
tramways,  electric  lighting,  electric  tramways,  and 
the  telephone. 

For  two  reasons  the  Tramways  Act,  1870,  paralyzed 
private  initiative.  In  the  first  place,  men  soon 
Conditions  which  learned  that  it  takes  time  to  build  up 
destroyed  Private   an  extended  street   railway   system; 

Initiative  and    ^    the    losges  suffered    in    the 

early  years  of  the  venture  cannot  always  be  made 
up  in  the  lifetime  of  a  charter  limited  to  twenty-one 
years,  with  provision  for  sale  on  the  basis  of  the  value 
of  the  material  put  into  the  plant.  That  lesson  was 
learned  so  thoroughly  that  to  this  day  English  capi- 
talists look  askance  at  street  railway  ventures. 
Many  of  the  largest  and  most  promising  schemes  now 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
p.  354,  Sir  Courtenay  Boyle,  Permanent  Secretary  to  the  Board  of  Trade. 


22       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

being  carried  on  in  England  are  supported  by  Ameri- 
can capital. 

The  second  reason  for  the  disastrous  working  of 
the  Tramways  Act,  1870,  is  to  be  found  in  the  abuse 
of  the  power  of  veto  conferred  on  the  municipali- 
ties. The  act  authorizes  the  Board  of  Trade,  with 
the  consent  of  the  local  authority  concerned,  to  grant 
companies  provisional  charters,  so-called  Provi- 
sional Orders.  These  Orders  must  be  laid  before 
Parliament,  and  if  that  body  does  not  disallow  them, 
they  become  Acts  of  Parliament.  The  consent  of 
the  local  authority  was  required  by  the  Act  of  1870 
because,  in  1870,  many  people  deemed  the  street 
railway  a  nuisance ;  and  because  the  local  authority 
might  choose  itself  to  build  the  tramways.  So  far 
as  the  government  of  the  day  was  concerned,  there 
was  no  thought  of  enabling  the  local  authorities  to 
sell  their  assent  that  a  Provisional  Order  be  given 
to  a  company.  Indeed,  it  will  be  remembered  that 
Mr.  Shaw-Lefevre  expressly  stated  that  it  was  im- 
possible to  make  the  tramways  both  contribute  to 
the  public  treasury  and  provide  cheap  and  extended 
service  to  the  public.  None  the  less,  the  local  au- 
thorities rarely  gave  their  assent  to  the  Board  of 
Trade  granting  a  Provisional  Order  to  a  company; 
they  almost  invariably  sold  it. 

As  early  as  1872,  Mr.  Newton,  late  chairman  of 
the  Metropolitan  Board  of  Works'  Parliamentary 
Committee  on  Tramways,  stated  before  the  Joint 


THE  TRAMWAYS  ACT,    1870  23 

Select  Committee  on  Tramways  (Metropolis)  that: 
1  'Under  the  Act  of  Parliament  the  road  authorities 
(vestries  and  parishes)  and  the  local  authority 
(Metropolitan  Board  of  Works)  have  concurrent 
jurisdiction;  and  the  Board  of  Trade  was  prohib- 
ited from  granting  Provisional  Orders  unless  the 
promoters  obtained  the  consent  of  two- thirds  of 
the  road  authorities  upon  the  line  of  a  particular 
tramway.  It  was  very  difficult  to  get  that  majority. 
Some  of  the  road  authorities  were  willing,  but  some 
wanted  to  make  better  terms  for  themselves.  They 
were  exacting  as  to  the  quantity  of  paving  which 
should  be  done  by  the  Tramway  Company,*  and  the 
local  benefits  which  should  be  conferred,  and  in 
that  way  some  refused  their  consent;  some  were 
willing  for  one  company  and  some  for  another,  just 
as  they  could  get  the  greatest  promises  from  them 
as  to  what  should  be  done;  the  consequence  was 
that,  in  some  instances,  the  consent  of  two-thirds  of 
the  road  authorities  was  not  obtained.  ...  I  think 
it  would  be  very  much  better  if  that  sort  of  authority 
is  exercised  in  the  future,  that  there  should  be  a 
power  in  the  Board  of  Trade  to  decide  upon  the 
merits  of  a  scheme  after  hearing  both  parties,  with- 
out its  being  necessary  that  two-thirds  of  the  road 
authorities  should  be  in  favor  of  any  particular 
company."  f 

*  That  is,  in  excess  of  the  amount  fixed  by  the  Act  of  1870,  —  namely, 
the  space  between  the  rails  and  to  points  18  inches  to  the  side  of  the  rails. 

f  Report  jrom  the  Joint  Select  Committee  on  Tramways  {Metropolis), 
1872,  q.  463. 


24       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

Mr.  Hopkins,  engineer  in  chief  to  tramway  com- 
panies operating  in  London,  Liverpool,  Dublin,  and 
Glasgow,  said:  "When  we  lay  down  a  tramway  in 
Metropolitan  London  in  a  road  already  paved,  we 
have  to  pay  the  local  authorities  for  the  existing 
paving  $2.25  to  $2.50  a  yard.  The  local  authorities 
say,  'If  you  can  afford  to  build  a  tramway  in  a 
macadamized  road  and  pay  for  the  cost  of  (granite) 
paving,  you  can  afford  to  pay  us  the  cost  of  the 
paving  which  is  already  there.'  "  Mr.  Hopkins  con- 
tinued with  the  statement  that  at  $3  a  yard,  the  com- 
pany had  to  pay  $30,000  per  mile  of  double  track 
for  existing  paving.  The  practice  "is  becoming 
more  general  every  day;  we  had  not  to  do  it  in  the 
earlier  days."  * 

In  the  course  of  the  proceedings  of  the  Select 
Committee  on  Tramways,  1877,  Mr.  Salt,  the  chair- 
man, stated  that  in  1872  the  towns  of  Aberdeen  and 
Dundee  f  had  made  it  a  condition  of  their  assent  to  a 
Provisional  Order  that  after  the  dividends  of  the  re- 
spective tramway  companies  should  reach  a  certain 
point,  the  towns  should  receive  rentals  of  respec- 
tively $100  a  mile  and  $500  a  mile.  He  added, 
"  In  the  case  of  Provisional  Orders  it  is  quite  possible 
that  clauses  may  be  introduced  which  may  not  only 
override  the  principles  of  the  public  law,  but  may 
actually,  in  that  particular  case,  repeal  clauses  of 

*  Report  from  the  Joint  Select  Committee  on  Tramways  {Metropolis), 
1872,  q.  67,  68,  184,  187,  and  1249. 

t  Population  in  1871:  Aberdeen,  88,000;  Dundee,  121,000. 


THE   TRAMWAYS   ACT,    1870  25 

the  public  law."  To  Mr.  R.  H.  Wyatt,  a  parlia- 
mentary agent  in  the  service  of  the  government, 
the  chairman  said:  "Any  kind  of  bargain,  good  or 
bad,  pure  or  corrupt,  may  be  made  (with  a  munici- 
pality) before  a  Provisional  Order  is  put  forward 
for  consideration  in  a  public  office  (the  Board  of 
Trade);  is  not  that  so?"  Mr.  Wyatt  replied:  "I 
think  the  present  system  is  in  that  respect  most 
objectionable ;  I  can  quite  understand  why  the  con- 
sent of  the  local  authorities  was  to  be  obtained  in 
the  first  instance  when  tramways  were  a  mere  ex- 
periment, but  now  that  they  have  become  an  estab- 
lished fact,  I  think  that  power  of  vetoing  the  pro- 
ceedings in  Parliament  (or  before  the  Board  of  Trade) 
is  most  objectionable.  Of  course  facts  have  come 
to  my  knowledge  in  confidence  which  I  could  not 
reveal  here ;  but  the  system  is  abused.  .  .  .  We  know 
that  it  works  very  unjustly,  and,  in  the  interests  of 
the  public,  it  is  very  objectionable  in  this  way: 
that  if  blackmail  (I  do  not  use  the  term  offensively) 
is  exacted  in  any  shape,  whether  in  the  shape  of  a 
condition  that  they  shall  pave  the  streets,  or  that  they 
shall  pay  any  sum  of  money  for  widening  bridges,  or 
anything  of  that  kind,  if  they  cripple  the  bromoters, 
it  is  impossible  that  the  undertaking  can  pay,  and 
if  it  does  not  pay,  the  public  is  not  well  served."  * 
Before  the  Select  Committee  on  Tramways,  1878, 

*  Report  from  the  Select  Committee  on  Tramways  {Use  of  Mechanical 
Power),  1877,  q.  2645  to  2651. 


26       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

Mr.  D.  Parrish,  who  had  built  the  first  tramway 
under  parliamentary  charter,  said :  "I  have  had  con- 
siderable experience  in  dealing  with  road  authorities, 
and  I  have  found  them  sometimes  very  difficult  to 
deal  with,  and  very  difficult  to  make  any  terms  with 
at  all ;  they  seem  to  look  upon  a  tramway  company 
as  one  who  ought  to  pay  most  of  their  road  expenses, 
and,  in  fact,  they  ask  for  very  many  extraordinary 
clauses.  .  .  .  Out  of  four  Bills  which  I  am  promoting 
this  Session,  two  have  been  withdrawn  on  account  of 
our  being  unable  to  come  to  terms  with  the  local 
authority."  One  of  the  Bills  withdrawn  by  Mr. 
Parrish  had  asked  for  a  charter  in  Bradford.  The 
municipality  had  insisted  on  a  clause  giving  it  power 
to  order  at  any  time  the  removal  of  the  tracks,  with- 
out compensation,  and  without  proof  of  nuisance. 
As  far  back  as  1872,  Mr.  Parrish  had  obtained  from 
Bradford  a  charter  with  that  clause  in  it,  but  he  had 
been  obliged  to  let  the  charter  lapse,  being  unable 
to  raise  money  under  it.  Mr.  Parrish  added  that 
it  was  very  desirable  that,  for  causes  of  that  kind, 
there  be  given  power  of  appeal  to  the  Board  of 
Trade.* 

Mr.  Hopkins,  engineer  in  chief  to  tramways  in 
London,  Liverpool,  Dublin,  and  other  important 
cities,  said:  "Speaking  generally,  local  authorities 
never  give  their  consent  for  the  laying  down  of  tram- 

*  Report  from  the  Select  Committee  on  Tramways  ( Use  of  Mechanical 
Power)  Bills,  1878,  q.  1244  to  1247,  and  1330  to  1340. 


THE   TRAMWAYS   ACT,   1870  27 

ways ;  they  sell  it.  .  .  .  We  find  it  very  hard  to  get 
any  fair  terms  from  the  road  authorities.  ...  To  my 
knowledge,  this  very  Session,  a  great  many  Tram- 
way Bills  have  been  withdrawn,  simply  on  the  ground 
of  the  excessive  terms  put  upon  them  by  the  road 
authorities.  .  .  .  Where  unreasonable  terms  are  asked, 
I  think  that  an  appeal  to  the  Board  of  Trade  would 
have  been  an  immense  benefit,  up  to  the  present  time 
for  the  tramway  companies.  ...  I  know  cases  where 
the  tramway  companies  maintain  the  whole  road."  * 
Section  34  of  the  Tramways  Act,  1870,  reads: 
"All  carriages  used  on  any  tramway  shall  be  moved 
by  the  power  prescribed  by  the  special  Act,  and  where 
no  such  power  is  prescribed,  by  animal  power  only." 
Under  that  clause,  in  1876,  a  number  of  promoters 
of  Bills  applied  for  authority  to  use  steam  or  other 
mechanical  power.  The  proprietors  of  cabs  and 
omnibuses,  who  feared  trade  competition ;  the  owners 
of  carriages,  who  asserted  that  crossing  street  rail- 
way tracks  jolted  them,  and  injured  their  carriages; 
and  the  proprietors  of  the  more  fashionable  retail 
stores,  who  asserted  that  the  passing  cars  interfered 
with  the  carriages  of  their  customers,  made  these 
applications  for  power  to  use  steam  on  the  tramways 

*  Report  from  the  Select  Committee  on  Tramways  {Use  oj  Mechanical 
Power)  Bills,  1878,  q.  879  to  886,  and  981  to  984. 

It  may  be  added,  in  passing,  that  whenever  the  distance  between  the 
outer  rail  and  the  curb  is  less  than  9'  6",  the  local  authorities  stipulate 
that  the  tramway  company  pave  and  maintain  the  entire  street.  In 
Metropolitan  London  the  companies  are  obliged  to  pave  and  maintain 
the  entire  street  whenever  the  width  is  less  than  30  feet. 


28       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

the  excuse  and  occasion  for  a  renewal  of  the  war  of 
long  standing  that  they  had  waged  against  the  street 
railway.  The  Government  was  unwilling  to  assume 
the  responsibility  of  offending  those  interests,  and 
therefore  it  rejected  all  but  two  of  the  applications 
for  permission  to  use  steam  or  other  mechanical 
power.  Those  two  applications  were  unopposed: 
one  was  for  a  country  tramway  connecting  Wantage 
with  the  Wantage  railway  station ;  the  other  was  for 
the  tramway  between  Glasgow  and  Go  van,  operated 
by  the  Vale  of  Clyde  Steam  Tramway  Co.  In  these 
instances,  the  Government  sanctioned  the  use  of 
mechanical  power,  "but  only  as  an  experiment." 

In  1877  there  were  applications  from  Birkenhead, 
Dublin,  Edinburgh,  Glasgow,  Gal  way,  Ipswich, 
Failure  of  At-  Leeds,  Leicester,  London,  Bristol, 
tempt  to  limit  Dewsbury,  Nottinghamshire,  Shef- 
Veto  Power  of     fte\d}  Swansea,  and  Wolverhampton. 

Municipalities  ,  ,       -r»    «i  r^r.    •  r     /"»  •*. 

Mr.  Raikes,  Chairman  of  Commit- 
tees of  the  House  of  Commons,  moved  for  a  Com- 
mittee "to  consider,  how  far,  and  under  what  regula- 
tions, the  employment  of  steam  or  other  mechanical 
power  may  be  allowed  upon  tramways  and  public 
roads."  He  said  that,  from  a  reading  of  clause  34 
of  the  Act  of  1870,  "it  appeared  that  Parliament  had 
in  its  mind  at  the  time  the  possibility  of  other  than 
animal  power  being  employed,  but  no  general  principle 
was  laid  down  (in  1870)  as  to  its  desirability  or  unde- 
sirability."      On  a  subsequent  occasion,  he  said:  "I 


THE   TRAMWAYS   ACT,   1870  29 

assume  that  as  far  as  we  have  hitherto  gone  in  our 
legislation,  we  have  not  had  expressly  under  con- 
sideration of  this  House  the  possible  use  of  steam 
upon  street  tramways."  The  Select  Committee  was 
granted ;  and  it  reported  in  favor  of  the  use,  experi- 
mentally, of  mechanical  power.  On  May  11,  1877, 
the  Government  brought  in  a  Bill  based  on  the  re- 
port of  the  Select  Committee,  but  the  opposition  of 
the  municipalities  was  such  that  the  Government 
withdrew  the  Bill  on  June  28.* 

In  1878,  the  House  of  Commons  again  referred 
to  a  Select  Committee  the  question  of  the  use  of 
mechanical  power.  Once  more  the  report  was  in 
favor  of  permitting  the  use,  experimentally,  of 
mechanical  power.  The  Chairman  of  the  Committee, 
Mr.  Arthur  Peel,  said  in  the  House  of  Commons: 
"The  evidence  in  favor  of  steam  had  been  really 
so  overwhelming,  that  they  (the  Committee)  had  as- 
sumed as  a  fact  that  steam  ought  to  be  permitted, 
although  they  fully  recognized  that  it  ought  only  to 
be  permitted  under  the  most  stringent  regulations 
and  safeguards  for  the  protection  of  the  public." 
After  a  long  debate  the  House  indorsed  the  Report 
of  the  Select  Committee  by  voting  the  Third  Reading 
of   the    Aberdeen    District   Tramways  Bill.f     But 

*  Hansard's  Parliamentary  Debates,  February  27,  1877,  p.  1082  and 
following;  April  23,  p.  1672;  May  11  and  June  28;  and  February  5, 
1878,  pp.  1038  to  1040. 

t  Ibid.,  June  17,  1878,  p.  1574  and  following,  and  1606;  May  27, 
p.  747;   and  April  15,  p.  1275. 


80       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

when  that  Bill  reached  the  House  of  Lords,  that 
body  rejected  the  clauses  permitting  the  use  of  steam 
power.  The  Lords  acted  upon  the  promise  of  the 
Earl  of  Redesdale,  Lord  Chairman  of  Committees, 
that  a  Select  Committee  of  the  House  of  Lords 
should  be  appointed  in  the  following  year,  1879. 
He  would  remind  their  Lordships  that  hitherto  the 
question  had  been  mainly  confined  to  tramways  in 
streets  and  towns;  but  there  were  now  several 
schemes  for  tramways  carried  along  roads  in  the 
country.  The  matter,  therefore,  now  required  care- 
ful re-consideration,  and  it  was  very  desirable  that 
there  should  be  full  consideration."  * 

In  1879,  the  Select  Committee  of  the  House  of 
Lords  reported  in  favor  of  the  use,  experimentally, 
of  steam  or  other  mechanical  power.  It  also  in- 
dorsed the  " principles"  which  the  Select  Committee 
of  the  House  of  Commons,  1878,  had  said  should 
govern  the  granting  of  licenses  for  the  use,  experi- 
mentally, of  steam  or  other  mechanical  power. 
These  principles  were:  "The  local  authorities  are 
competent  judges  of  the  policy  of  encouraging  steam 
on  Tramways,  and  should  be  at  liberty  to  make  such 
contracts  and  agreements  with  promoters  as  they 
may  deem  best  for  the  local  interests  which  they 
represent.  The  Board  of  Trade  should  have  powers 
to  intervene  on    behalf   of   the  public    (1)  to  pre- 

*  Hansard's  Parliamentary  Debates,  July  26,  1878,  pp.  341  to  343 
and  February  20,  1879,  p.  1501. 


THE   TRAMWAYS   ACT,   1870  31 

vent  undue  pressure  being  put  by  local  authorities 
upon  promoters  ;  (2)  to  prevent  bargains  being  made 
by  which  the  public  may  be  injured  either  as  residents 
or  as  ratepayers.  Looking  to  the  novelty  of  the  pro- 
posed undertaking,  to  the  greater  profits  which  the 
use  of  steam  may  render  possible  to  companies,  and 
to  the  possible  failure  and  inconvenience  of  the  use 
of  steam  or  other  mechanical  power  in  frequented 
thoroughfares,  it  is  desirable  (1)  to  provide  for  a 
periodical  revision  of  tolls;  (2)  to  provide  for  the 
cessation,  at  the  end  of  seven  years,  of  the  contract 
or  agreement  under  which  the  use  of  steam  or  other 
mechanical  power  may  be  sanctioned,  so  that  at  the 
end  of  that  and  of  recurring  periods  of  like  duration 
the  concession  should  either  absolutely  terminate  or 
be  so  modified  and  generally  revised  as  the  experience 
gained  may  seem  to  require."  * 

In  the  House  of  Commons,  Mr.  Arthur  Peel,  who 
had  been  Chairman  of  the  Select  Committee  of  1878, 
and  had  served  in  1871  to  1873  as  Parliamentary 
Secretary  to  the  Board  of  Trade,  said :  "  The  local 
authorities  might  be  not  unfairly  assumed  to  be  the 
best  judges  of  the  interests  they  were  elected  to  main- 
tain. The  Committee  (of  1878)  were  of  opinion, 
therefore,  that  the  local  authorities  should  be  able 

*  Report  from  the  Select  Committee  on  Tramways  {Use  of  Mechanical 
Power)  Bills,  1878,  p.  iv;  and  Report  from  the  Select  Committee  of  the 
House  of  Lords  on  Tramways,  1879,  p.  v:  "  There  should  be  freedom 
of  contract  between  the  Local  Authority  and  the  Promoters  as  to  con- 
tributions to  local  rates,  fares,  tolls,  and  general  charges,  subject  to  an 
appeal  to  the  Board  of  Trade." 


32       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

to  make  what  contracts  they  pleased  with  the  pro- 
moters who  wished  to  institute  steam  tramways  in 
any  particular  district;  but  they  also  thought  that 
the  public  might  be  protected  against  the  promot- 
ers on  the  one  side  and  the  local  authorities  on 
the  other.  The  local  authorities,  for  instance, 
might  in  some  cases,  be  disposed  to  levy  such 
an  amount  of  blackmail  from  the  promoters  of 
steam  tramways  as  would  materially  interfere 
with  the  undertaking.  On  the  other  hand,  the 
local  authorities  (that  is,  the  city  officials  as  in- 
dividuals) might  be  promoters  themselves,  or  might 
be  induced  to  make  such  a  bargain  with  the  pro- 
moters of  the  tramways  as  would  be  prejudicial  to 
the  public  interests.  The  Committee,  therefore, 
said  that  if  there  was  anything  in  the  contract  which 
made  it  objectionable  to  the  inhabitants,  the  Board 
of  Trade  should  be  constituted  friends  of  the  public, 
and  should  be  able  to  step  in  and  see  whether  the 
terms  of  the  contract  militated  either  against  any 
particular  interest,  or  against  the  interests  of  the 
place  in  general.  He  knew  very  well  that  there 
had  been  in  past  times  a  feeling  in  that  House  against 
tramways  altogether.  When  horse  tramways  were 
started,  there  was  a  strong  feeling  against  them,  but 
he  thought  the  time  had  now  passed  when  horse 
tramways  were  regarded  as  objectionable.  Under 
all  the  circumstances  he  thought  the  House  ought  to 
be  very  careful  as  to  prohibiting  entirely  the  intro- 


THE   TRAMWAYS   ACT,    1870  33 

duction  of  steam  tramways  .  .  .  steam  tramways 
would  very  much  reduce  fares."  * 

The  Government,  however,  introduced  no  Bill  to 
limit  the  power  of  veto  of  the  local  authorities,  or 
to  make  the  Board  of  Trade  the  arbitrator  between 
the  local  authorities  and  the  promoters,  in  questions 
involving  the  terms  upon  which  the  use  of  steam  or 
other  power  should  be  allowed.  '  The  local  authori- 
ties retained  full  power  to  say  whether,  and  upon 
what  terms,  steam  or  mechanical  power  should  be 
used.  The  result  was  the  complete  abandonment 
of  that  part  of  the  policy  of  the  Tramways  Act  of 
1870  which  said  that  the  profits  of  the  tramway 
companies  should  be  in  no  way  limited,  in  considera- 
tion of  the  facts  that  the  charters  were  limited  to 
twenty-one  years  and  provided  for  compulsory  sale 
at  structural  value. 

All  Provisional  Orders  authorizing  the  use  of 
mechanical  power  contain  the  provisions  that  at 
any  time  after  three  years  after  the  opening  of  the 
Burdens  placed  tramways,  the  local  authority,  or 
upon  street  twenty    inhabitant    ratepayers,    may 

Railways  agk    ^    Board    of    Trade    for    a    re_ 

vision  of  fares  (tolls).  Upon  such  request  being 
made,  the  Board  of  Trade  may  appoint  a  referee  who 
shall  report  in  writing.  If  the  referee  shall  report 
in  favor  of  revision,  the  Board  of  Trade  shall  fix 

*  Hansard's  Parliamentary  Debates,  June  17,  1878,  p.  1577  and 
following. 


34       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

the  fares  to  be  charged,  such  fares  to  remain  in  force 
until  revised  by  the  Board  of  Trade. 

Many  Provisional  Orders  granted  in  1879  and  the 
subsequent  years  contain  clauses  compelling  the 
companies  to  give  the  local  authorities  one-half  of 
their  profits  in  excess  of  a  certain  rate,  say  10  per 
cent  or  15  per  cent  *  Some  companies  have  sub- 
mitted to  such  terms,  and  upon  applying,  a  few 
years  afterwards,  for  permission  to  extend  their 
lines,  they  have  been  obliged  to  lower  the  limit  in 
question  from,  say,  12.5  per  cent  to  11  per  cent.f 

The  Burnley  and  District  Tramways  Order,  1879, 
contains  the  provision  "that  if  in  any  years  the 
Promoters  have  declared  a  dividend  upon  the  capital 
invested  of  6  per  cent,  the  local  authority  shall  have 
power  to  call  on  the  Promoters  to  build  'certain 
specified  extensions.'"  Other  Provisional  Orders 
contain  clauses  giving  the  local  authority  power  to 
call  upon  the  company  at  any  time  to  build  exten- 
sions. In  such  cases,  the  Board  of  Trade  is  to  act 
as  referee,  or  is  to  appoint  the  referee  .J 

Provisional  Orders  often  contain  clauses  empower- 
ing the  local  authority  to  purchase  the  tramway 
at  the  expiration  of  five,  ten,  or  some  other  number  of 
years,  after  the  opening  of  the  line.  In  such  cases 
it  is  usually  provided  that  the  price  shall  be  fixed 

*  The  Leamington  and  Warwick  Tramways  Order,  1879,  and  The 
Derby  Tramways  Order,  1879. 

t  The  Leicester  Tramways  (Extension)  Order,  1884. 
%  The  Shipley  Tramways  Order,  1885. 


THE  TRAMWAYS  ACT,   1870  35 

by  arbitration  under  the  Land  Clauses  Consolida- 
tion Act,  1845  —  that  is,  with  allowance  for  com- 
pulsory sale.  But  the  Paisley  Tramways  Order, 
1885,  gives  the  local  authority  power  to  purchase  ten 
years  after  the  opening  of  the  line,  on  the  basis  of 
paying  "the  amount  of  the  original  cost  of  the  con- 
struction of  the  tramways  and  all  lands  and  build- 
ings" and  the  market  value  of  the  rolling  stock, 
horses,  and  other  perishable  equipment. 

The  Swansea  Tramway  Order,  1879,  provides  that 
the  promoters  shall  not  begin  the  building  authorized 
by  the  Order  until  they  shall  have  paid  to  the  Borough 
the  sum  of  $2000  toward  widening  a  certain  road 
upon  which  the  tramway  is  to  be  built.*  Again, 
the  Lea  Bridge,  Leyton,  and  Walthamstow  Tramway 
Act,  1884,  binds  the  company,  "before  opening  a 
section  of  its  line  for  traffic,  to  defray  the  main  cost 
of  widening  part  of  the  road,  an  improvement  de- 
sired and  debated  by  the  Local  Board  of  Works 
long  before  the  tramway  was  proposed."  f  Often- 
times two  or  more  of  the  foregoing  disabilities  will 
be  put  into  a  Provisional  Order 4 

Frequently  a  local  authority  will  try  to  put  into 
the  Provisional  Order  such  provisions  that  the 
Board  of  Trade  will  be  obliged  to  warn  the  local 


*  Report  by  the  Board  of  Trade  of  their  Proceedings  under  ' '  The 
Tramways  Act,  1870,"  and  "  The  Gas  and  Water  Facilities  Act,  1870," 
during  the  session  of  1879,  p.  5. 

t  F.  Clifford:  History  of  Private  Bill  Legislation,  Vol.  I,  p.  191. 

%  The  Derby  Tramways  Order,  1879. 


36       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

authority  that  either  the  Chairman  of  Committees 
of  the  House  of  Commons  or  the  Chairman  of  Com- 
mittees of  the  House  of  Lords  will  disallow  the  pro- 
vision in  question  as  being  " against  public  policy." 
For  example,  in  1879,  the  Borough  of  Derby  tried 
to  insert  a  clause  compelling  the  promoters  to  pur- 
chase "the  omnibus  undertakings  and  plants  of  the 
various  public  and  private  omnibus  proprietors  in 
the  Borough."  *  Again,  in  the  Edinburgh  Northern 
Tramways  Bill,  1884,  the  municipalities  of  Edin- 
burgh and  Leith,  as  the  price  of  their  assent  to  the 
Bill,  required,  among  other  things,  the  payment  by 
the  company  of  a  way-leave,  rising  by  yearly  gradua- 
tions to  $500  per  mile  per  annum.  This  provision 
passed  a  Committee  of  the  House  of  Commons  but 
was  struck  out  in  the  House  of  Lords  as  being  "con- 
trary to  public  policy."  f 

Oftentimes  provisions  that  would  be  disallowed 
by  one  or  the  other  Chairman  of  Committees  are 
made  the  subject  of  private  bargains  between  the 
local  authorities  and  the  promoters.  For  example, 
before  the  Joint  Select  Committee  on  Municipal 
Trading,  1900,  Mr.  Murphy,  one  of  the  largest 
builders  of  tramways,  said:  "I  am  paying  rent  for 
way-leave  in  some  undertakings  I  have  got  in  England 
this  year.     Parliament,  I  know,  objects  to  it  and  will 

*  Report  by  the  Board  of  Trade  on  their  Proceedings  under  ' '  The 
Tramways  Act,  1870,"  and  "  The  Gas  and  Water  Facilities  Act,  1870," 
during  the  session  of  1879,  p.  5. 

t  F.  Clifford:  History  of  Private  Bill  Legislation,  Vol.  I,  p.  191. 


THE   TRAMWAYS   ACT,    1870  37 

not  sanction  it  in  Private  Bills.  The  Earl  of  Morley 
(since  1889  Chairman  of  Committees  of  the  House 
of  Lords)  set  his  face  against  it  and  will  not  have  it, 
but  it  is  done  by  private  agreement  between  the  com- 
panies and  the  local  authorities."  * 

Mr.  Hobhouse,  a  member  of  the  Joint  Select 
Committee  of  1900,  said,  "Speaking  as  Chairman 
of  a  Private  Bill  Committee,  we' are  sometimes  told 
by  counsel  that  companies  are  in  honor  bound  to 
carry  out  the  things  which  are  struck  out  of  the 
Bill."  And  Mr.  Albert  Gray,  Counsel  to  the  Chair- 
man of  Committees  of  the  House  of  Lords,  added 
that  the  driving  of  bargains  such  as  are  here  under 
discussion  "probably  must  lead  to  corruption  in 
some  form  or  other,  because  we  have  this  state  of 
things:  An  agreement  is  made  between  a  company 
and  a  local  authority  that  a  rent  must  be  paid. 
If  the  Lord  Chairman,  or  the  Chairman  of  Ways 
and  Means  in  the  House  of  Commons,  directs  the 
clause  to  be  struck  out,  it  is  struck  out,  but  the 
agreement,  the  contract,  remains,  and  the  company 
may  pay  this  rent,  or  if  they  do  not  pay  it  in  the 
form  of  a  rent,  they  may  pay  it  in  some  other 
form,  and  perhaps  it  does,  or  perhaps  it  does  not, 
get  into  the  municipal  accounts.  I  know  not  what 
happens  to  it."  f 

That  local  authorities  have  the  means  of  enforcing 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
q.  15 18;    compare,  also,  q.  3058  and  3954. 
f  Ibid.,  1900,  q.  714  and  341. 


38       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

agreements  that  have  been  disallowed  is  shown  by 
the  following  incident.  A  tramway  company  had 
obtained  an  Act  of  Parliament  authorizing  the  con- 
version from  horse  traction  to  electric  traction. 
When  the  company  took  steps  to  increase  the  radius 
of  the  curves  at  street  corners,  in  order  that  electric 
cars  might  pass  over  the  curves,  the  municipality 
demanded  a  contribution  of  $100,000  toward  the 
cost  of  widening  the  streets,  not  only  at  the  turn- 
outs in  question,  but  also  at  other  places.  The 
municipality  argued  that  the  company  was  proposing 
to  occupy  more  space  in  the  streets  than  it  had  been 
occupying.  The  matter  was  taken  to  court,  and 
was  referred  to  the  Board  of  Trade  for  arbitration. 
But  before  the  arbitrator  was  appointed,  the  Mayor 
approached  the  chairman  of  the  company,  with  the 
words:  "It  is  in  our  power  to  give  you  this  trouble 
every  time  you  come  to  us;  is  not  it  worth  while  to 
settle?"  Before  the  Joint  Select  Committee  on 
Municipal  Trading,  1900,  the  chairman  of  the  com- 
pany said:  "In  order  to  settle  and  dispose  of  that 
matter,  the  company  agreed  to  the  payment  of 
$25,000,  which  I  regard  as  a  very  improper  payment, 
but  as  a  commercial  transaction  the  directors  de- 
cided that  it  was  cheaper  to  do  that  than  to  have  the 
constant  harass  and  worry  of  litigation  every  time 
we  wanted  to  make  a  small  alteration  for  which  con- 
sent might  be  necessary."  * 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
q.  1203. 


THE   TRAMWAYS  ACT,   1870  39 

Mr.  W.  M.  Murphy,  who  had  built  tramways 
in  England,  Scotland,  Ireland,  and  on  the  Continent, 
said:  " Sometimes  they  make  the  terms  so  onerous 
that  one  has  to  abandon  the  project.  I  have  had 
to  do  that  in  more  than  one  instance."  In  reply 
to  the  Chairman's  request  for  a  specific  instance,  he 
said :  "I  was  promoting  a  line  this  year  on  the  north 
side  of  the  Clyde,  and  the  town  of  Dumbarton  wanted 
such  terms  that  I  abandoned  the  thing.  ...  I 
may  say  it  was  one  of  those  enterprises  which  are 
of  very  doubtful  value.  Dumbarton  is  a  small 
place  (population,  15,000)  coming  to  the  size  of  a 
town,  where  it  is  doubtful  whether  tramways  will 
pay,  and  in  addition  to  the  ordinary  terms  as  to  the 
paving  of  the  streets,  they  wanted  a  large  block  of 
buildings  taken  down  at  the  corner  of  a  street, 
which  would  not  pay."  *  In  December,  1904, 
Dumbarton  still  was  without  street  railways. 

Mr.  S.  Morse  appeared  on  behalf  of  the  London 
Chamber  of  Commerce,  being  the  chairman  of  that 
body's  Committee  on  Municipal  Trading.  He  said : 
"I  have  had  a  large  experience  in  dealing  with  local 
authorities  in  these  matters,  and  what  I  find  is 
shortly  that  (of  course  I  am  speaking  generally)  they 
do  not  consider  the  matter  purely  on  the  question 
as  to  whether  the  proposed  questions  are  desired  in 
the  public  interest  or  not;   they  apparently  consider 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
q.  1517  to  1531. 


40       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

it  from  the  point  of  view  that  their  consent  is  made 
by  the  Tramways  Act,  1870,  the  condition  precedent 
to  the  grant  of  any  powers,  and  it  is  for  them  there- 
fore to  hang  conditions  on  to  the  fullest  extent 
possible.  I  have  a  case  in  mind  which  I  may  per- 
haps mention  of  a  very  important  town  where  I  was 
present  on  behalf  of  a  tramway  company  at  a  meet- 
ing of  a  very  large  council  in  committee.  The 
chairman  of  the  committee  was  the  ex-mayor  and 
there  was  a  very  full  attendance,  and  he  put  it  quite 
frankly.  He  said:  'Gentlemen,  these  promoters 
have  to  obtain  our  consent;  and  I  suggest  to  you 
that  we  should  get  the  very  best  terms  we  can;' 
in  fact,  he  used  the  expression,  'We  should  bleed 
them.'  I  am  not  quarrelling  with  it,  I  am  merely 
giving  it  as  a  fact  which  has  come  before  me  pro- 
fessionally ....  We  were  proposing  to  spend 
$5,000,000  in  buying  up  tramways  in  an  important 
district,  making  them  electrical  and  a  complete 
scheme;  we  had  settled  everything  practically  with 
every  local  authority,  including  this  one,  except 
that  they  claimed  to  supply  the  electrical  energy 
(from  their  municipal  light  plant)  with  which  to 
work  the  tramways  at  a  price  which  we  found  was 
prohibitive,  with  the  result  that  we  had  to  withdraw 
our  Bill."  * 
Mr.    E.    Garcke,    who   was   Managing   Director 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
q.  786. 


THE   TRAMWAYS   ACT,    1870  41 

of  the  British  Electric  Traction  Co.,  with  assets 
of  $8,280,000,  as  well  as  a  director  in  twenty-five 
other  traction  companies,  said:  "It  is  almost  a 
truism  to  me  that  a  municipal  corporation  having 
an  electric  lighting  plant  is  most  anxious  to  take 
up  electric  tramways  for  one  of  two  reasons :  either 
because  they  have  made  a  profit  on  their  electric 
lighting,  and  they  argue  we  shall  not  make  a  mis- 
take in  taking  up  electric  tramways,  ...  or  else  they 
are  anxious  to  do  it  for  this  other  reason  —  that, 
having  made  a  loss  upon  electric  lighting,  they  are 
very  anxious  to  obtain  electric  tramways  in  order  to 
largely  increase  the  demand  for  their  electricity.  .  .  . 
Then  I  have  several  instances  in  my  mind  where 
local  authorities  have  not  entered  upon  electric 
lighting,  although  they  have  obtained  Provisional 
Orders,  because  they  have  felt  nervous  as  to  whether 
the  demand  in  their  town  would  be  sufficient;  but 
directly  I  come  before  them  and  say,  'Gentlemen, 
will- you  give  me  a  concession  for  an  electric  tram- 
way?' (probably  I  own  the  horse  tramway  in  their 
town),  they  say:  'Then  you  will  become  a  customer 
for  electricity.  If  we  give  our  consent  to  convert 
this  line  to  electric  traction,  will  you  buy  your  elec- 
tricity from  us,  if  we  put  up  a  plant?'  I  have  had 
several  cases  where  I  have  made  that  arrangement, 
and  I  have  had  to  wait  for  the  electricity  for  my 
tramways  until  the  local  authorities  have  been  able 
to    establish    their    electric    lighting    undertaking, 


42       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

which  I  have  very  good  authority  for  saying  they 
probably  would  not  have  established  but  for  the 
prospect  of  receiving  a  very  large  customer  in  the 
shape  of  the  tramways." 

Mr.  Garcke  continued:  "I  might  mention  an- 
other form  of  Municipal  Trading  which  has  come 
under  my  direct  knowledge.  ...  I  am  interested 
in  the  development  of  a  very  large  electrical  traction 
scheme  in  South  Staffordshire,  and  there  is  also 
a  company  undertaking  the  supply  of  electricity 
over  the  whole  of  the  same  area.  ...  I,  or  rather 
my  representative,  went  to  some  of  the  local  author- 
ities in  that  district  for  their  consent  to  convert  the 
present  steam  tramway  to  electric  traction,  and  the 
(municipal)  corporation  officials,  or  some  of  the 
members  of  the  council,  suggested  that  we  should 
purchase  the  electric  current  from  their  council 
for  the  purposes  of  our  tramways.  Our  represent- 
ative replied,  '  But  you  have  not  got  a  power  plant, 
and  are  not  likely  to  have  one,  because  you  are  in 
treaty  with  the  (electricity  supply)  company  to  take 
your  current  from  that  company  in  bulk.'  They 
said,  'But  we  can  buy  that  current  from  that  com- 
pany and  sell  it  to  you  at  a  profit.'  "  * 

Mr.  Garcke  also  testified  that  he  was  interested 
in  a  large  company  which  had  purchased  the  horse 
tramways  of  Wolverhampton   (94,000   inhabitants) 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
q.  1171  and  1176. 


THE  TRAMWAYS   ACT,   1870      .  43 

and  of  many  adjoining  towns,  for  the  purpose  of 
welding  them  into  a  huge  electrical  system.  When 
the  company  applied  for  consent  to  convert  the 
Wolverhampton  tramways  to  electrical  traction,  the 
city  insisted  upon  the  company  taking  its  current 
from  the  municipal  light  plant.  The  company  re- 
fused to  comply,  first,  because  the  price  asked  for 
current  was  "very  exorbitant" ;'  second,  the  company 
had  power  plants  from  which  to  supply  its  whole 
system,  of  which  the  Wolverhampton  tramways 
formed  only  a  part.  Thereupon  the  city,  under  the 
Tramways  Act,  1870,  purchased  that  part  of  the 
Wolverhampton  tramways  that  lay  within  the  city 
limits,  5.75  miles,  out  of  a  total  of  10.5  miles.  The 
company  asked  the  city  to  buy  the  remaining  4.75 
miles  lying  outside  of  the  city  limits,  at  a  price  pro- 
portionate to  that  paid  for  the  lines  within  the  city. 
The  chairman  of  the  committee  of  the  town  council 
replied:  "No,  we  will  not  pay  the  same  rate  for 
the  outside  lines,  because  they  are  useless  to  you, 
or  will  become  useless  to  you  when  we  have  bought 
the  lines  inside,  and  you  will  have  to  come  to  us, 
cap  in  hand,  and  ask  us  to  take  them  off  your  hands." 
Mr.  Garcke  added:  "The  lines  outside  the  borough 
of  Wolverhampton  would  have  become  derelict  but 
for  the  exceptional  circumstance  that  another  com- 
pany was  able  to  buy  them  and  tack  them  on  to  an- 
other system,  and  that  company  agreed  to  pay  the 
same  proportionate  price  for  these  outside  lines  as 


4-4       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

the  corporation  of  Wolverhampton  paid  for  the  inside 
lines."  * 

In  July,  1 90 1,  the  Earl  of  Morley,  Chairman  of 
Committees  in  the  House  of  Lords  from  1889  to  1904, 
stated  that  within  a  year  or  two  after  the  enactment 
_     ,.     „  .       of  the   Tramways  Act,    1870,    each 

Standing  Order  '  '    \ 

No.  22  extends  House  of  Parliament  had  made  it  a 
Municipal  Veto  Standing  Order  —  No.  22  —  that  no 
to  Private  private  Bill  Committee  should  con- 

Charters 

sider  an  application  for  a  Private 
Tramway  Act,  unless  the  promoters  of  the  Act  proved 
the  consent  of  the  local  authority  concerned.  In  that 
way  the  absolute  veto  given  the  local  authorities  in  the 
case  of  Provisional  Orders  to  be  issued  by  the  Board 
of  Trade  under  the  Act  of  1870,  had  been  extended 
also  to  Private  Bills  asking  for  street  railway  charters. 
The  Earl  of  Morley  then  stated  that  in  1900,  he,  and 
the  Chairman  of  Committees  in  the  House  of  Com- 
mons, and  Mr.  Chaplin,  who,  as  President  of  the 
Local  Government  Board,  was  then  in  charge  of 
the  Government's  "Housing  of  the  Working  Classes 
Act,  1890,  Amendment  Bill,  1900,"  had  agreed  that 
the  Standing  Order  No.  22  ought  to  be  amended  so 
as  to  allow  the  Private  Bill  Committees  to  examine 
whether  the  local  authorities  had  withheld  their 
consent  unreasonably.  If  the  Private  Bill  Com- 
mittees should  conclude  that  consent  had  been  unrea- 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading, 
1900,  q.  1 199  to  1205. 


THE  TRAMWAYS    ACT,    1870  45 

sonably  withheld,  they  should  so  report  to  Parlia- 
ment, which  would  then  decide  whether  the  consent 
should  be  dispensed  with.  The  Earl  of  Morley 
added  that  in  July,  1900,  Mr.  Chaplin  had  said,  in 
the  debate  on  the  Third  Reading  of  the  Housing  of  the 
Working  Classes  Bill:  "After  a  conference  with 
the  Chairman  of  Committees  in  both  Houses,  I  am 
in  a  position  to  say  that  the  Government  are  willing 
to  make  such  alterations  in  that  Standing  Order 
and  propose  them  in  due  course,  as  will  modify  these 
restrictions  and  allow  the  question  to  be  brought 
before  Parliament  and  leave  to  the  Committee  the 
decision  as  to  whether  the  matter  should  go  forward 
or  not."  *  Finally,  Lord  Ribblesdale,  speaking  on 
behalf  of  the  London  County  Council,  in   August, 

1900,  had  asked  him  (the  Earl  of  Morley)  in  the 
House  of  Lords,  whether  the  Standing  Order  No. 
22  could  not  be  modified.  The  London  County 
Council  itself,  Lord  Ribblesdale  had  said,  had  been 
stopped  from  building  tramways,  through  inability 
to  get  the  consent  of  other  local  authorities,  f 

In  accordance  with  the  foregoing  understandings 
and  representations,  the  Earl  of  Morley,  early  in 

1 90 1,  had  given  notice  that  he  would  move  an  amend- 
ment to  Standing  Order  No.  22.  But  on  July  11 
he  informed  the  House  that  he  would  not  proceed 

*  Mr.  Chaplin's  statement  will  be  found  in  Hansard's  Parliamentary 
Debates,  July  12,  1900,  p.  1418. 

t  Lord  Ribblesdale's  statement  will  be  found  in  Hansard's  Parlia- 
mentary Debates,  August  2,  1900,  p.  405. 


46       MUNICIPAL  OWNERSHIP   IN  GREAT   BRITAIN 

with  his  motion.  The  London  County  Council 
had  changed  its  mind;  and  "he  had  found,  as  the 
Session  went  on,  that  there  was  little  or  no  intention 
of  moving  the  proposed  amendment  in  the  House 
of  Commons.  It  would  be  useless  to  amend  the 
Lords'  Standing  Order,  unless  the  Commons' 
Order  were  amended  at  the  same  time.  There- 
iore  he  would  drop  the  matter  for  the  time  being." 
He  added,  "  But  I  feel  very  strongly  about  it, 
and  if  I  get  any  sympathy  here  or  elsewhere  (in  the 
House  of  Commons),  I  shall  be  very  glad  to 
reintroduce  the  matter." 

The  Earl  of  Morley  set  forth  at  great  length  his 
reasons  for  desiring  the  amendment  of  Standing 
Order  No.  22,  speaking  from  the  knowledge  gained 
by  his  scrutiny  of  all  the  tramway  Provisional  Orders 
and  Private  Bills  that  had  been  enacted  since  1889. 
He  gave  numerous  striking  illustrations  of  the  man- 
ner and  spirit  in  which  the  local  authorities  either 
had  sold  their  consent,  or  had  withheld  it  entirely. 
Only  one,  however,  shall  be  here  produced.  He 
said:  "This  has  actually  happened  in  London 
within  the  last  year.  A  tramway  company  got  its 
bill  consented  to  by  one  of  the  London  municipalities 
through  whose  area  it  was  to  run,  and  immediately 
afterward  it  went  for  the  consent  of  the  London 
County  Council  —  which  was  only  remotely  inter- 
ested, and  only  interested  as  the  owner  of  a  (com- 
peting) tramway  in  another  part  of  London,  and 
they  refused  their  consent." 


THE   TRAMWAYS   ACT,   1870  47 

The  Earl  of  Morley  concluded  as  follows:  "My 
reasons,  if  I  may  be  allowed  to  recapitulate  them, 
are  these :  that  it  is  not  theoretically  right  that  any 
one  or  any  body  of  persons  should  have  an  absolute 
power  of  veto  and  should  be  able  to  prevent  a  scheme 
coming  in  any  shape  before  Parliament  against  their 
will;  that  it  is  against  the  principles  of  modern 
legislation,  especially  against  the  principles  of  the 
Light  Railways  Act;  that  it  is  not  right  for  rival 
proprietors  (as  it  is  in  the  case  of  large  munici- 
palities) to  have  the  power  of  absolutely  stopping  any 
rivals  from  coming  into  the  field;  that  there  is  an 
inconvenience  in  the  double  veto  of  the  road  author- 
ity and  the  local  authority,  and,  above  all,  that  it 
is  not  expedient  or  in  the  public  interests  that  you 
should  give  to  the  local  authorities  such  a  strong 
power  of  exacting  conditions  that  may  be  very  onerous 
upon  an  important  national  industry,  and  also  that 
you  should  encourage  the  promoters  of  these  under- 
takings to  bribe  the  local  authorities  in  some  way  or 
other.  When  I  use  the  word  'bribe,'  I  desire  dis- 
tinctly to  explain  that  I  do  not  mean  money  bribe, 
I  mean  bribing  by  offering  some  advantage  in  order 
to  get  the  consent  of  the  local  authority."  * 

Mr.  Chaplin,  shortly  after  carrying  through  Par- 
liament the  Housing  of  the  Working  Classes  Bill, 
1900,  resigned  the  office  of  President  of  the  Local 
Government  Board,  and  withdrew  from  the  Salis- 

*  Hansard's  Parliamentary  Debates,  July  n,  1901,  pp.  31  to  42. 


48       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

bury  Ministry.  In  May,  1901,  he  asked  the  First 
Lord  of  the  Treasury,  Mr.  A.  J.  Balfour:  "If  his 
attention  has  been  called  to  the  difficulties  which 
arise,  under  Standing  Order  22,  in  the  making  of 
tramways  in  London  in  order  to  facilitate  the  housing 
of  the  working  classes ;  and  whether,  having  regard 
to  the  pledges  which  were  given  by  the  Govern- 
ment in  relation  to  that  subject  during  the  last 
Parliament,  the  Government  propose  at  an  early 
opportunity  to  take  measures  to  give  effect  to  those 
pledges?"  In  reply  to  Mr.  Balfour's  statement, 
"I  am  not  aware  of  any  specific  pledge,  ..."  Mr. 
Chaplin  added:  "Is  my  right  honorable  friend  not 
aware,  or  has  he  forgotten,  that  in  the  Third  Reading 
of  the  Working  Classes  Bill,  and  with  the  sanction 
of  my  colleagues,  I  gave  such  a  pledge  on  behalf  of 
the  Government  myself?"  * 

One  year  later,  in  May,  1902,  Mr.  Chaplin  moved 
an  amendment  to  Standing  Order  22,  giving  the 
Private  Bill  Committee  power  to  examine  whether 
the  consent  of  the  local  authority  had  been  unreason- 
ably withheld,  and  to  report  accordingly  in  the  event 
of  unreasonable  withholding  of  consent.  He  said 
improved  means  of  locomotion  were  absolutely 
essential  to  giving  effect  to  the  Housing  of  the  Work- 
ing Classes  Act,  1900.  "There  is  no  doubt  in  the 
world  that  the  extension  of  the  tramway  system  is 
a  matter  of  the  first  importance  in  connection  with 

*  Hansard's  Parliamentary  Debates,  May  20,  1901,  p.  609. 


THE   TRAMWAYS  ACT,    1870  49 

the  great  problem  of  the  housing  of  the  poor.  At 
the  same  time,  this  extension,  as  matters  stand  now, 
is  hindered,  hampered,  and  checked  by  the  existing 
provisions  of  the  Standing  Order,  or  by  the  action 
taken  by  certain  local  authorities  under  it,  to  a  degree 
which  few  people  are  aware  of .  .  .  .  What  the  local 
authorities  would  describe  as  conditions,  are  re- 
garded by  the  promoters,  and  very  often  no  doubt, 
with  good  reason,  as  neither  more  nor  less  than  black- 
mail. I  could  give  many  instances  to  show  to  what 
extent  that  has  been  carried  on.  This  has  been  the 
subject  of  great  complaint  for  years,  to  which  I 
may  say  that  no  one  is  more  alive  than  the  Chair- 
man of  Committees,  both  in  this  and  the  other  House 
of  Parliament,  and  I  do  not  think  that  I  should  be 
going  too  far  if  I  said  that  on  several  occasions  it 
has  led  to  considerable  scandals."  * 

Mr.  J.  W.  Lowther,  who,  since  1895,  had  held 
the  office  of  Chairman  of  Committees  by  virtue  of 
being  Chairman  of  the  Committee  of  Ways  and 
Means,  said:  "We  have  heard  something  of  black- 
mail to-night  by  certain  local  authorities.  I  do  not 
think  it  necessary  to  go  into  that,  although  I  dare 
say  that  if  we  were  to  examine  very  closely  some  of 
the  Bills  which  have  been  before  Parliament  during 
the  last  few  years,  we  might  find  cases  to  which  that 
term    would    not    be    wholly    inapplicable."     Mr. 

*  Hansard's  Parliamentary  Debates,  May  15,  1902,  p.  438  and    fol- 
lowing. 


50       MUNICIPAL  OWNERSHIP   IN  GREAT   BRITAIN 

Lowther  added  that  it  was  a  serious  objection  to 
the  amendment  that  the  abolition  of  the  local  veto 
would  involve  the  local  authorities  in  the  expense 
of  defending  before  the  Parliamentary  Committees 
their  objections  to  the  granting  of  street  railway 
charters ;  but  that  there  were  still  greater  objections 
to  leaving  matters  in  their  present  state.  He  con- 
cluded with  the  words:  "Although  I  object  on  the 
score  of  expense,  I  think  the  balance  lies  in  favor  of 
the  change  proposed  by  my  honorable  friend,  and  if 
he  goes  to  a  division,  I  shall  support  him  in  the  lobby." 

Sir  Albert  K.  Rollit,  at  the  request  of  the  Muni- 
cipal Corporations  Association*  led  the  opposition 
to  the  amendment.  He  rested  his  case  upon  the 
argument  that  the  municipalities  would  become  in- 
volved in  great  expense  by  the  necessity  of  appearing 
against  the  numberless  applications  for  charters 
that  would  follow  the  repeal  of  the  veto  of  the  local 
authorities. 

Mr.  Goddard  expressed  sentiments  that  have 
many  adherents  in  the  Municipal  Corporations 
Association.  He  said:  "The  object  of  the  amend- 
ment must  be  to  increase  the  number  of  private  enter- 
prises in  boroughs  and  towns.  Now  was  that  a  desir- 
able end  to  attain?  Sooner  or  later  all  these  great 
schemes  would  have  to  be  bought  out  by  the  local 
authority,  and  any  local  authority  which  had  had 

*  This  association  in  1905  had  a  membership  consisting  of  296  munici- 
pal corporations. 


THE   TRAMWAYS   ACT,    1870  51 

any  experience  in  having  to  buy  out  these  kinds 
of  enterprises  would  know  something  of  the  diffi- 
culties and  the  great  expense  they  were  put  to  in 
regard  to  such  purchases.  He  did  not  think  they 
ought  to  open  the  door  wider  to  this  kind  of  private 
enterprise,  and  for  those  reasons  he  should  vote 
against  the  amendment." 

Mr.  Chaplin  was  obliged  to  withdraw  his  amend- 
ment. 

From  1878  to  1895  the  net  earnings  of  the  tram- 
ways of  the  United  Kingdom  averaged  5.2  per  cent 
upon  the  capital  invested.  In  no  year  did  they  rise 
to  6  per  cent,  and  in  five  years  only  did  they  reach 
5.5  per  cent.*  Those  net  earnings  had  to  provide 
for  sinking  fund  and  depreciation  charges,  as  well 
as  for  the  interest  on  the  capital  invested.  It  is 
clear  beyond  the  possibility  of  controversy  that  the 
tramway  industry  afforded  no  margin  of  profit 
that  could  carry  the  extortionate  practices  by  the  local 
authorities  from  motives  of  greed. 

The  responsibility  for  the  sanction  given  by  the 
Parliamentary  Select  Committees  of  1878  and  1879 
to  the  policy  of  municipal  trading  in  street  railway 
The  Bureaucrat  franchises,  rests  largely  upon  the  late 
•versus  the  Men  of  Lord  Farrer,  who  entered  the  Board 
Affairs  of     Trade     sometime     about     1846, 

shortly   after   having   been  graduated  from  Balliol 

*  Board  of  Trade  Return  of  Street  and  Road  Tramways  Authorized 
by  Parliament,  showing  the  Amount  of  Capital  Authorized,  Paid  up,  and 
Expended;  etc.,  annual  issues. 


52       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

College,  Oxford ;  was  made  assistant  Secretary  of 
Marine  Department  of  the  Board  of  Trade  in  1850; 
was  Permanent  Secretary  to  the  Board  of  Trade 
from  1873  to  1886;  and,  in  1893,  was  raised  to  the 
Peerage  "for  public  service."  Lord  Farrer  had 
much  influence  in  shaping  legislation  on  all  mat- 
ters within  the  province  of  the  Board  of  Trade ;  and 
"even  in  matters  not  within  his  own  department, 
he  was  constantly  resorted  to  by  the  government  for 
information  and  advice."  * 

In  1878,  Mr.  Farrer  testified  as  follows  before 
the  House  of  Commons  Select  Committee:  "And  it 
appeared  to  the  Board  of  Trade  and  to  the  author- 
ities of  the  House  that  if  you  are  going  to  give  to 
these  tramway  companies  what  will  really  be  a  very 
valuable  privilege  to  them,  something  which,  ac- 
cording to  their  own  statements,  will  enable  them 
very  largely  to  increase  their  dividends,  you  ought, 
at  the  same  time,  to  make  provision  that,  in  some 
form  or  other,  the  public  shall  get  a  considerable 
portion  of  that  advantage."  Mr.  Farrer  then  stated 
that,  in  1877,  Mr.  Hopkins,  the  engineer  of  the  North 
Metropolitan  Tramway  Co.,  had  testified  that  the  use 
of  steam  would  enable  the  company  to  save  4  cents 
per  car  mile  on  the  traction  charges.  That  saving, 
Mr.  Farrer  said,  would  raise  the  dividends  of  the 
North  Metropolitan  Tramway  Co.  from  8.5  per  cent 

*  Sir  Robert  Giffen's  introduction  to  T.  H.  Farrer:  The  Stale  in  its 
Relation  to  Trade. 


THE   TRAMWAYS   ACT,    1870  53 

to  about  13  per  cent.  "I  do  not  vouch  for  the  par- 
ticular figure,  but  I  merely  use  this  as  an  illustration. 
If  that  is  so,  we  think  that  certainly  in  some  form  or 
another,  the  public  ought  to  share  in  the  advantage 
of  that  saving.  .  .  .  The  companies  will,  of  course, 
tell  you  that  with  that  saving  they  will  give  the  pub- 
lic additional  facilities.  We  do  not  always  find  that 
when  undertakers  have  a  monopoly  of  a  public  enter- 
prise, they  give  the  public  the  benefit  of  all  the  sav- 
ings that  they  may  make ;  they  are  apt  to  put  it,  and 
very  properly,  into  the  pockets  of  their  shareholders. 
Therefore,  now  that  the  thing  is  going  to  be  allowed 
for  the  first  time,  this  is  the  proper  time  at  which 
to  make  conditions  with  the  companies."  * 

As  the  permanent  head  of  the  Board  of  Trade, 
Mr.  Farrer  had  abundant  opportunities  for  inform- 
ing himself  as  to  the  profitableness  of  street  railways. 
But  as  chief  witness  before  the  Select  Committee 
he  selected  one  of  the  most  profitable  lines  in  Great 
Britain  and  contented  himself  with  showing,  by  a  very 
superficial  calculation,  that  the  use  of  steam  power 
would  increase  the  profits  of  the  company  from 
8 J  per  cent  to  about  13  per  cent.  He  did  not  even 
raise  the  question  whether  the  use  of  steam  would 
increase  the  wear  and  tear  upon  the  permanent 
way,  necessitate  the  re-building  of  the  roadbed, 
and  thus  counteract  in  part  the  saving  to  be  made 
in  the  traction  charges. 

*  Report  from  the  Select  Committee  on  Tramways  Bills,  1878,  q.  17 
and  following. 


64       MUNICIPAL  OWNERSHIP   IN    GREAT   BRITAIN 

A  few  months  after  Mr.  Fairer  had  testified,  the 
Board  of  Trade  issued  an  annual  return*  which 
showed  that  in  the  year  ending  with  July,  1878,  the 
net  receipts  of  the  tramway  companies  of  the  United 
Kingdom  had  averaged  barely  5.5  per  cent,  and 
that  many  companies  had  barely  earned  operating 
expenses. 

Mr.  Hopkins,  engineer  to  the  North  Metropolitan 
Tramway  Co.,  the  Liverpool  Company,  the  Dublin 
Company,  and  companies  in  other  British  cities,  testi- 
fied before  the  Select  Committee  of  1878  that  his  state- 
ment made  in  1877,  that  the  use  of  steam  would 
enable  the  North  Metropolitan  Co.  to  save  4  cents 
per  car  mile,  was  based  on  the  knowledge  that 
Messrs.  Hughes  &  Co.,  the  owners  of  a  patented 
tramway  engine,  had  made  a  contract  to  move  the 
cars  of  the  Vale  of  Clyde  Steam  Tramway  Co.  for 
1 1.5  cents  per  car  mile.  He  added  that  since  he 
had  made  that  statement  before  the  Select  Com- 
mittee of  1877,  Messrs.  Hughes  &  Co.  had  told  him 
that  they  were  losing  money  on  the  contract,  which 
they  had  made  because  they  were  very  anxious  to 
obtain  the  first  contract  in  the  United  Kingdom  as 
an  advertisement  and  as  an  introduction  to  other 
companies,  f 


*  Board  of  Trade  Return  of  Street  and  Road  Tramways  Authorized 
by  Parliament,  showing  the  A  mount  of  Capital  A  uthorized,  Paid  up,  and 
Expended;   etc. 

t  Report  from  the  Select  Committee  on  Tramways  Bills,  1878,  q.  890 
and  451  to  453. 


THE   TRAMWAYS   ACT,    1870  55 

In  striking  contrast  to  the  testimony  of  the  Per- 
manent Secretary  to  the  Board  of  Trade  was  the 
testimony  given,  in  1878,  by  the  men  who  were  es- 
tablishing the  new  industry  of  street  railway  build- 
ing. To  Mr.  Alexander  Wood,  M.D.,  Chairman 
of  the  Edinburgh  Street  Tramway  Co.,  the  Chair- 
man of  the  Select  Committee  put  the  question: 
"Do  you  disapprove  of  the  proposal  to  tax  mechani- 
cal power  on  the  tramways  in  the  same  way  as 
railroads  are  taxed"  (a  tax  of  5  per  cent  on  passenger 
receipts)?  Mr.  Wood  replied:  "I  think  that  it 
would  be  a  pity  in  the  infancy  of  the  tramways  to 
discourage  them  in  any  way.  I  think  they  require 
encouragement  more  than  discouragement;  if  they 
are  to  be  taxed,  I  think  that  the  tax  ought  not  to 
go  to  the  road  authorities,  but  should  go  to  diminish 
the  fares." 

In  1870,  the  Lord  Provost  of  Edinburgh  had  called 
a  meeting  of  the  citizens  of  Edinburgh  to  consider 
the  question  of  improving  the  housing  of  the  poorer 
classes,  asking  Mr.  Alexander  Wood  to  preside. 
Mr.  Wood  and  Mr.  Cowan,  upon  further  investiga- 
tion, had  concluded  that  the  way  to  deal  with  the 
overcrowding  of  the  poorer  classes  was  to  spread  out 
the  city.  At  that  time  Edinburgh  had  196,500  inhab- 
itants, of  whom  no  less  than  31,416  lived  in  the  con- 
dition of  3  to  10  people  in  one  room,  while  another 
35,813  lived  in  the  condition  of  5  to  10  persons  in 
two  rooms.     Mr.  Wood  and  Mr.  Cowan,  after  in- 


56       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

specting  the  only  tramways  then  in  operation  in 
Great  Britain,  —  those  of  Birkenhead,  Liverpool, 
and  London,  —  had  organized  a  company  for  the 
building  of  tramways  in  Edinburgh  for  the  express 
purpose  of  curing  this  evil,  by  decentralizing  the 
population. 

Mr.  Dillwyn  Parrish,  a  contractor,  who  had  built 
the  Liverpool  tramways,  the  Dublin  tramways, 
and  the  North  Metropolitan  tramways,  appeared 
before  the  Select  Committee  of  1878,  and  said  that 
on  steep  grades  where  more  than  two  horses  were 
required,  steam  power  was  economical;  on  a  level 
road  where  one  horse  would  answer  it  was  not  eco- 
nomical ;  and  it  depended  on  the  special  circumstances 
of  the  case  whether  it  was  economical  on  a  level 
road  where  two  horses  would  answer.* 

Mr.  Barfoot,  Chairman  of  the  Leicester  Tramways, 
supported  the  testimony  of  Mr.  Parrish.  He  said 
he  proposed  to  use  steam  only  for  the  purpose  of 
joining  Leicester  with  the  outlying  manufacturing 
villages,  which  could  not  profitably  be  reached  by 
means  of  horse  tramways. f 

Mr.  Richardson,  Chairman  of  the  North  Metro- 
politan Co.,  as  well  as  of  the  Dublin  Co.,  expressed 
the  opinion  that  there  was  no  great  saving  in  the  use 
of  steam  for  ordinary  traffic,  but  that  steam  was 
valuable  in  meeting  sudden  and  short  demands  for 

*  Report  from  the  Select  Committee  on  Tramways  Bills,  1878,  q.  1237 
to  1252. 

t  Ibid.,  1878,  q.  226  and  following. 


THE   TRAMWAYS   ACT,    1870  57 

exceptional  transportation  facilities.  A  tramway 
company  could  keep  steam  engines  in  reserve  for 
such  occasions ;  but  it  could  not  keep  a  stud  of  horses 
for  such  occasions,  for  the  horses  would  eat  off  their 
heads.* 

The  Select  Committees  of  Parliament  and  Par- 
liament itself  indorsed  the  views  of  the  bureaucrat 
and  rejected  the  arguments  of  the  men  of  affairs. 

In  1877  the  first  cable  street  railway  was  opened 
in  the  United  States.  In  1890,  there  were  55  such 
systems,  with  a  route  mileage  of  283  miles,  and  a 
track  mileage  of  488  miles,  f  By  1902  more  than 
one-half  of  them,  with  a  track  mileage  of  248  miles, 
had  been  discarded  as  antiquated. 

In  1882,  the  British  Parliament  confirmed  the 
first  Provisional  Order  authorizing  the  use  of  the 
cable,  and  in  1883,  it  authorized  nine  such  orders.  J 
But  in  1890,  there  were  in  operation  in  the  United 
The  Cable  system,  Kingdom  not  to  exceed  8  miles  of 
like  steam,  not  cable  street  railway.  In  1897  and 
used  on  British  fae  subsequent  years,  long  after  the 
ramways  caDle   had    been    abandoned   in   the 

United  States,  the  city  of  Edinburgh  built  some  22 
miles  of  cable  railway.  § 

*  Report  from  the  Select  Committee  on  Tramways  Bills,  1878,  q.  632. 

t  Report  on  Transportation  Business  n  the  United  States  at  the 
Eleventh  Census :  1890,  Parti;  and  United  States  Census:  Bulletin?,. 

%  Report  by  the  Board  of  Trade  on  their  Proceedings  under  ' '  The 
Tramways  Act,  1870,"  etc.;    1882  and  1883. 

§  Board  of  Trade  Return  of  Street  and  Road  Tramways  authorized 
by  Parliament,  etc.,  1902;  The  Municipal  Year  Book,  1899,  p.  444  J  and 
Duncan's  Manual  of  Tramways,  Omnibuses,  and  Electric  Railways,  1904. 


58       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

The  failure  of  the  cable  system  to  get  a  foothold 
in  Great  Britain  was  due  in  part  to  the  fact  that 
from  1879  to  1896  authority  to  use  mechanical 
power  was  given  for  periods  of  seven  years  only; 
in  part  it  was  due  to  the  fact  that  the  life  of  fran- 
chises was  limited  to  twenty-one  years  and  ended 
with  compulsory  sale  on  the  basis  of  the  value  of 
the  materials  embodied  in  the  plant.  On  those 
terms,  capitalists,  with  unimportant  exceptions, 
were  unwilling  to  incur  the  enormous  outlays  of 
money  demanded  by  the  cable  system  of  traction. 

In  1 88 1,  the  firm  of  Siemens  Bros.  &  Co.,  of 
Berlin  and  London,  built  the  first  electric  railway, 
that  from  Berlin  to  Lichterfelde.  In  1883,  the  same 
firm  built  an  electric  railway  and  tramway  in  the 
northern  part  of  Ireland,  from  Portrush  to  Bush- 
mills.* In  that  same  year  a  short  electric  tramway 
was  opened  at  Brighton  Beach,  a  watering  place 
near  London.  In  1884,  the  municipality  of  Black- 
pool built  a  short  electric  line.  In  1885  and  1886, 
two  further  electric  lines  were  built  in  Ireland  and 
on  the  Isle  of  Wight,  respectively.  From  1887  to 
1889,  electric  railway  building  was  suspended.  In 
1890  to  1895,  nine  lines  were  built.  At  the  close 
of  1895,  when  tramway  building  by  companies 
under  the  Tramways   Act,    1870,  may  be  said  to 

*  Report  from  the  Joint  Select  Committee  on  the  Electric  and  Cable 
Railways  {Metropolis),  1892,  q.  672,  W.  H.  Pierce,  Engineer  in  Chief 
to  the  Post  Office  Department.  Compare  Report  from  the  Joint  Select 
Committee  on  Municipal  Trading,  1900,  q.  1650. 


THE   TRAMWAYS  ACT,   1870  59 

have  come  to  an  end,  there  were  in  the  United 
Kingdom  fourteen  electric  tramways,  with  a  route 
mileage  of  not  to  exceed  65.5  miles,  and  a  track  mile- 
age of  not  to  exceed  135  miles.  Of  those  tram- 
ways, not  less  than  five,  with'  a  route  mileage  of 
26  miles  lay  in  Ireland  and  the  Channel  Islands, 
territory  to  which  the  Tramways  Act,  1870,  does 
not  extend.  A  sixth  tramway,  the  Liverpool  Over- 
head, an  elevated  railway,  with  a  route  mileage  of 
6.75  miles,  and  a  track  mileage  of  13.50  miles,  also 
was  beyond  the  reach  of  the  blighting  Act  of  1870.* 

In  the  United  States,  there  were  no  permanently 
successful  electric  tramways  in  operation  in  1885. 
Two  permanently  successful  tramways  were  opened  in 
1886;  six  in  1887;  thirty  in  1888;  fifty-seven  in  1889, 
and  forty-nine  in  the  first  six  months  of  1890.  On 
June  30,  1890,  there  were  in  operation  in  the  United 
States  144  electric  tramways,  with  a  route  mileage 
of  914  miles,  and  a  track  mileage  of  1262  miles.f 

There  were  two  reasons  for  the  failure  of  the 
electric  tramway  to  get  a  foothold  in  the  United 
Reasons  for  Fail-  Kingdom  in  the  period  from  1883 
ure  to  develop  to  1 895.  The  first  was  the  com- 
Ehctrk  Tram-  pulsory  purchase  clause  in  the  Tram- 
ways  ways  Act,  1870.     The  second  was  the 

complete  paralysis  in  the  United  Kingdom  of  the 

*  Garcke:  Manual  of  Electrical  Undertakings,  issues  of  1898-99  and 
1904. 

t  Report  on  Transportation  Business  in  the  United  States  at  the  Elev- 
enth Census:   1890,  Part  I. 


60       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

electric  lighting  industry,  in  the  period  from  1882 
to  1888.  That  paralysis  prevented  the  British 
electrical  engineer  from  acquiring  practical  experi- 
ence in  the  art  of  transmitting  electrical  energy 
over  long  distances  without  such  loss  of  energy 
as  would  make  unprofitable  the  application  of 
electricity  to  street  railway  traction. 

As  for  the  paralyzing  effect  of  the  Tramways 
Act,  1870,  the  municipalities  now  themselves  admit 
that  electric  tramways  cannot  be  built  under  twenty- 
one-year-compulsory-sale  franchises,  though  they 
are  not  willing  to  permit  the  amendment  of  the 
Act  of  1870.  In  response  to  the  demands  of  the 
Association  of  Municipal  Corporations,  both  Houses 
of  Parliament  in  1901  amended  their  Standing 
Orders  in  such  way  as  to  allow  a  municipality 
that  wished  to  build  a  tramway  into  the  territory 
of  an  adjoining  municipality  to  obtain,  by  means 
of  a  Private  Bill,  a  franchise  for  a  period  not  ex- 
ceeding forty-two  years.  Up  to  that  time,  the 
Standing  Orders  had  limited  such  franchises  to  a 
maximum  of  twenty-one  years.  Mr.  J.  W.  Low- 
ther,  Chairman  of  Committees  in  the  House  of 
Commons,  in  moving  the  amendment  to  the  Stand- 
ing Order,  said:  "It  has  been  found,  especially 
in  the  case  of  electric  tramways,  that  twenty-one 
years  is  not  a  sufficient  period.  Engineers  put 
the  life  of  an  electric  tramway  at  forty-two  years, 
and    we    propose    to   amend    the    Standing    Order 


THE  TRAMWAYS   ACT,   1870  61 

accordingly.  Of  course,  forty-two  years  will  be 
an  outside  limit.  ...  In  1870,  when  the  Tram- 
way Act  was  passed,  twenty-one  years  was  taken  as 
the  life  of  a  tramway.  At  that  time  only  horse 
tramways  existed,  but  at  the  present  time  many 
corporations  (i.e.  municipalities)  are  laying  down 
electric  tramways  (in  the  territory  of  their  neighbors), 
and  the  expense  connected  with  the  installation  of 
these  is  so  large  that  it  has  been  found  not  to  be 
worth  while  to  lay  them  down  unless  for  an  extended 
period.  If  they  have  to  sell  them  at  the  end  of 
twenty-one  years,  they  are  losers  by  the  transaction."* 
As  for  the  second  factor  that  prevented  the  elec- 
tric tramway  from  getting  a  foothold  in  the  United 
Kingdom  in  the  period  from  1883  to  1895,  this 
was  the  situation.  In  1881,  British  capitalists, 
representing  millions  of  pounds  sterling,  stood 
ready  to  support  the  leading  British  engineers  in 
exploiting  the  incandescent  electric  light,  which 
had  just  then  been  perfected  to  the  point  of  becom- 
ing available  for  use  on  a  commercial  basis.  There 
was,  it  is  true,  some  question  whether  it  would  be 
possible  to  transmit  current  over  long  distances 
without  undue  loss  —  in  other  words,  whether  it 
would  be  commercially  possible  to  install  electric 
power  plants  that  should  furnish  light  over  large 

*  Hansard's  Parliamentary  Debates,  March  15,  1901,  p.  45  and  fol- 
lowing. The  corresponding  motion,  made  by  the  Earl  of  Morley,  Chair- 
man of  Committees  in  the  House  of  Lords,  will  be  found  on  p.  198, 
March  18,  1901. 


62       MUNICIPAL  OWNERSHIP   IN  GREAT   BRITAIN 

areas.  But  British  engineers  and  capitalists  were 
not  only  ready,  but  anxious,  to  try  the  experiment. 
Indeed,  the  Swan  Company,  as  well  as  the  British 
Edison  Company,  on  the  strength  of  six  months' 
licenses,  in  1881,  built  power  plants  in  London 
and  lighted  certain  streets,  as  well  as  the  shops  and 
offices  in  those  streets. 

The  British  capitalists  and  engineers  asked  Par- 
liament not  to  repeat  the  mistake  of  1870.  But 
the  municipalities  in  the  past  years  had  invested 
heavily  in  gas  plants;  and  they  now  feared  that 
the  electric  light  would  seriously  impair  the  earn- 
ing power  of  their  municipal  gas  plants.  They 
were  well  organized,  and  aggressive;  and  they  had 
a  powerful  friend  in  Mr.  Joseph  Chamberlain, 
President  of  the  Board  of  Trade.  Mr.  Chamber- 
lain, it  will  be  remembered,  had  begun  his  political 
career  as  a  champion  of  municipal  trading,  par- 
ticularly in  gas,  partly  because  he  held  that  the 
profits  to  be  made  from  municipal  trading  would 
diminish  taxation,  partly  because  he  desired  to 
magnify  the  office  of  the  municipal  politician. 

Under  pressure  from  the  municipalities,  Par- 
liament, in  1882,  inserted  in  the  Electric  Lighting 
Act  the  twenty-one  year  compulsory  sale  clause 
of  the  Tramways  Act,  1870.  At  the  close  of  1888, 
there  was  in  the  United  Kingdom  no  chartered 
electric  light  company  that  used  the  streets  for  the 
purpose  of  distributing  current  for  power  or  for 


THE   TRAMWAYS  ACT,   1870  63 

incandescent  light.  In  the  long  period  from  1882 
to  1888,  the  British  engineer  was  denied  the  oppor- 
tunity to  solve,  by  practical  experience,  the  prob- 
lem of  transmitting  electrical  energy  over  long  dis- 
tances, without  undue  loss.  For  the  solution  of 
that  problem,  the  experience  gained  in  operating 
the  large  number  of  plants  installed  by  theatres, 
hotels,  department  stores,  warehouses,  factories, 
and  mills,  helped  him  not. 

In  the  meantime,  in  the  United  States,  there 
were  opened  in  1881  to  1885,  no  less  than  167  cen- 
tral electric  stations  which  distributed  current  for 
power  and  for  light.  In  1886,  there  were  opened 
100  such  central  stations;  in  1887,  there  were 
opened  147;    and  in  1888,  there  were  opened  160. 

When  the  American  engineer,  backed  by  the 
American  promoter  and  captain  of  industry,  took 
up,  in  1886,  the  problem  of  applying  electrical 
power  to  street  railway  traction,  he  could  draw  on 
the  knowledge  and  experience  gained  in  the  build- 
ing and  operating  of  167  central  electric  stations 
—  knowledge  and  experience  augmented  in  the  two 
years  1886  and  1887,  by  the  building  and  oper- 
ating of  247  additional  central  electric  stations. 

The  American  promoter  and  captain  of  industry 
had  a  further  great  advantage  in  the  fact  that  the 
existing  horse  railways,  as  a  rule,  had  very  long- 
lived  charters,  fifty,  ninety-nine,  and  nine  hundred 
and    ninety-nine    years    being    the    most    common 


64       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

period  for  which  charters  had  been  granted.  Those 
long-lived  charters  made  it  possible  for  the  Ameri- 
can promoter  to  obtain  capital  for  the  hazardous 
experiment  of  converting  horse  railways  to  elec- 
tric railways  —  an  experiment  that  could  not  suc- 
ceed unless  the  application  of  electricity  should 
increase  enormously  the  street  railway  traffic. 
The  existing  horse  railways  had  to  be  re-equipped 
and  rebuilt.  The  electric  motors  were  too  heavy 
for  the  old  cars,  and  the  latter  had  no  selling  value ; 
the  use  of  heavy  electric  cars  made  it  necessary  to 
reconstruct  the  roadbed  and  to  sell  the  old  rails 
at  "scrap"  prices;  the  old  barns  and  car-houses 
had  to  be  sacrificed,  and  fortunate  was  the  man- 
ager who  could  obtain  for  his  horses  even  one- 
third  their  original  cost.  All  electric  machinery 
was  very  high  in  price,  as  well  as  liable  to  be  ren- 
dered useless  through  further  inventions. 

It  is  a  matter  of  record  that  in  the  years  1892  to 
1896  electrical  machinery  fell  enormously  in  price, 
and  that  the  fall  entailed  heavy  losses  upon  the 
pioneers  in  electric  street  railway  building.  In 
1896  the  Massachusetts  State  Railroad  Commis- 
sion stated  in  its  annual  report  that  "a  suburban 
railway,  including  power  plant,  which  in  1892 
cost  $35,500  per  mile  of  track  to  build  and  equip, 
could  be  built  and  equipped  in  the  same  manner 
in  1895  for  $22,600  per  mile  of  track.  Motors 
formerly   costing   $2850   now   can   be   bought   for 


THE  TRAMWAYS  ACT,    1870 


65 


$850."  It  is  also  a  matter  of  record  that  the  Boston 
Elevated  Railway  Co.,  formerly  the  West  End  Rail- 
way Co.,  in  1900  was  using  on  its  surface  cars  its 
fifth  equipment  of  motors,  having  "  scrapped "  four 
equipments  in  the  course  of  twelve  years.  It  was 
this  heavy  fall  in  prices,  together  with  the  neces- 
sity of  throwing  aside  equipment  before  it  had  been 
worn  out,  that  led  the  Massachusetts  Railroad 
Commission  to  report,  in  1896,  that  "the  electric 
railway  is  not  on  the  whole  earning  so  large  a  return 
as  did  its  predecessor,  the  horse  railway.  This 
is  as  true  with  respect  to  the  city  as  with  respect 
to  the  country  railways,  taken  as  a  class.  .  .  . 
Again,  take  only  the  older  and  stronger  dividend- 
paying  companies,  which  have  about  87  per  cent 
of  the  total  capital  stock.  The  average  dividend 
paid  by  these  companies  was:  7.13  per  cent  in  1885, 
7.03  per  cent  in  1890,  and  6.63  per  cent  in  1895."  * 

*  Annual  Reports  of  the  Massachusetts  Board  of  Railroad  Commis- 
sioners, 1896,  1900,  and  1903. 

Comparative    Results    of    Horse    Power   and    Electric    Power 
upon  the  Street  Railways  of  Massachusetts 


1835 

1890 

1895 

1899 

1903 

Capital  stock  and   net   debt 

per  mile  of  main  line  .     . 

$35,008 

$38,256 

$49,100 

$45,040 

$46,261 

Percentage   of  railway  elec- 

trically equipped     .     .     . 

0 

26.26 

94.27 

99-73 

100 

Percentage  of  net   earnings 

to  capitalization      .     .     . 

8.38 

8.98 

7-74 

7-°5 

7-74 

Percentage   of    dividend    to 

capital  stock      .... 

6.28 

6.47 

5-76 

5.60 

5-23 

Percentage  of  surplus  to  capi- 

14.41 

4-74 

3.06 

6.01 

6.26 

66       MUNICIPAL  OWNERSHIP  IN  GREAT   BRITAIN 

In  1893  this  subject  of  the  losses  unavoidable 
in  the  development  of  new  industries  was  made 
the  subject  of  a  court  record.  In  the  case  of  Mil- 
waukee Electric  Railway  and  Light  Co.  vs.  City 
of  Milwaukee,  the  Circuit  Court  of  the  Eastern 
District  of  Wisconsin  *  found  that  the  company 
had  invested  $8,885,644  in  a  street  railway  which, 
in  1898,  could  have  been  replaced  for  $5,000,000. 
The  difference,  $3,885,644,  the  Court  said,  repre- 
sented "preliminary  expenditures  —  cost  of  ac- 
quiring old  horse  lines,  experiments,  deprecia- 
tion in  value  of  material  used,"  etc.  The  Court 
continued:  "How  much  of  this  $3,885,644  may 
be  denned  or  apportioned  as  the  amount  which 
was  both  'really  and  necessarily  invested  in  the 
enterprise,'  I  have  not  attempted  to  ascertain, 
except  to  this  extent:  that  I  am  clearly  of  opinon 
that  at  least  $2,000,000  of  these  preliminary  ex- 
penditures are  entitled  to  equitable  consideration, 
as  so  invested  beyond  the  reproduction  value,  if 
the  valuation  is  not  otherwise  found  sufficient  for 
all  the  purposes  of  this  case,  but  no  opinion  is 
expressed  in  reference  to  the  remaining  $1,885,644." 

The  difficulties  and  dangers  illustrated  by  these 
quotations  from  the  experience  of  the  electric  street 
railways  in  the  State  of  Massachusetts  and  the 
City  of  Milwaukee,  were  clearly  foreseen  by  the 
pioneer    promoters   of   electric    street    railways   as 

*  Federal  Reporter,  Vol.  87. 


THE   TRAMWAYS   ACT,   1870  67 

well  as  by  the  capitalists  to  whom  these  promoters 
appealed  for  funds.  The  promoters  and  the  capi- 
talists were  willing  to  face  the  difficulties  and  as- 
sume the  risks,  because  the  possession  of  franchises 
of  long  life  promised  the  opportunity  to  recover 
the  losses  that  were  a  necessary  incident  to  the 
development  of  the  new  industry. 


CHAPTER   III 

THE    LIGHT    RAILWAYS    ACT,     1 896 

In  1896,  Parliament  passed  "An  Act  to  facili- 
tate the  construction  of  Light  Railways  in  Great 
Britain."  *  That  Act  was  to  remain  in  force  for 
five  years,  by  way  of  experiment;  but  since  1901 
it  has  been  renewed  each  year.  With  one  excep- 
tion, presently  to  be  mentioned,  the  discussion  of 
the  Bill  was  confined  to  the  agricultural  depression 
in  Great  Britain,  and  the  necessity  of  affording 
relief  by  the  building  of  inexpensive  light  railways 
which  should  give  the  farming  regions  better  access 
to  the  existing  railways.  Neither  the  Act  of  1896, 
nor  any  other  statute,  defines  " light  railways"; 
therefore  tramways  may  be  built,  and  are  built, 
under  authority  of  the  Light  Railways  Act,   1896. 

While  the  Bill  was  before  the  House  of  Commons, 
Mr.  Channing  moved  that  it  be  amended  so  as  to 
give  the  local  authorities  power  to  purchase  on  the 
terms  of  the  Tramways  Act,  1870,  any  tramways 
that  might  come  to  be  built  under  the  Light  Rail- 
ways Act.  He  withdrew  that  amendment,  how- 
ever, after  Mr.  Ritchie,  who,  as  President  of  the 

*  59  and  60  Vict.  1896,  c.  48. 
68 


THE   LIGHT   RAILWAYS   ACT,    1896  69 

Board  of  Trade,  was  in  charge  of  the  Bill,  had 
said:  "He  thought  that  enterprise  would  be  very 
largely  stopped  if  a  local  authority  could  wait  until 
they  saw  that  one  of  these  railways  was  a  success 
and  then  come  forward  and  demand  to  purchase 
it.  That  was  a  most  unreasonable  request  to  make, 
and  would  greatly  interfere  with  the  making  of 
these   railways."  * 

The  Act  instructs  the  President  of  the  Board  of 
Trade  to  appoint  three  Light  Railway  Commis- 
sioners, who  may  issue  Provisional  Orders  for  the 
building  of  light  railways.  Those  Orders,  upon 
confirmation  by  the  Board  of  Trade,  shall  have 
effect  as  if  enacted  by  Parliament.  The  Light 
Railway  Commissioners,  or  the  Board  of  Trade, 
among  other  things,  may  embody  in  the  Orders 
provisions  fixing  the  maximum  rates  and  charges 
for  traffic,  as  well  as  provisions  empowering  any 
local  authority  to  acquire  the  railway  at  the  expira- 
tion of  a  stated  period  and  upon  stated  terms. 

At  the  close  of  1903,  the  Light  Railway  Com- 
missioners had  dealt  with  244  applications  for 
Administration  of  Provisional  Orders  for  tramways  on 
Act  represses  ini-  streets  and  roads.     Those  tramways 

tiative  in  building  were  tQ  jiaye  a  route  mfleage  of   1 87 1 

miles,  and  they  were  estimated  to  cost 
$89,522,000.      The  Light   Railway    Commissioners 

*  Hansard's  Parliamentary  Debates,  July  30,  1896,  p.  11 29  and 
following. 


70      MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

had  issued  Provisional  Orders  for  127  tramways 
with  a  route  mileage  of  592  miles,  and  an  esti- 
mated cost  of  $28,769,000.  They  had  rejected 
62  applications,  covering  a  route  mileage  of  617 
miles.  The  remaining  applications  had  been  with- 
drawn, because  the  promoters  had  become  con- 
vinced that  the  Light  Railway  Commissioners  would 
reject  them.*  This  record  of  the  rejection  of 
68  per  cent  of  the  street  railway  mileage  for 
which  charters  had  been  asked  under  the  Light 
Railway  Act  does  not  mean  that  the  building  and 
operation  of  street  railways  is  a  "noxious  trade" 
which  should  be  restricted  to  the  utmost,  in  the 
public  interest.  It  means  simply  that  the  British 
Government,  which  determines  the  policy  of  the 
Board  of  Trade  and  the  spirit  with  which  that 
bureaucratic  body  administers  the  laws  of  Great 
Britain,  is  subject  to  the  political  pressure  exer- 
cised through  the  House  of  Commons  by  the  Asso- 
ciation of  Municipal  Corporations  and  the  Asso- 
ciation of  Urban  District  Councils.  The  former 
of  these  associations  embraces  294  municipal  cor- 
porations out  of  a  total  of  352  corporations.  Its 
objects  are:  "By  complete  organization  more 
effectually  to  watch  over  and  protect  the  interests, 
rights,    and    privileges    of    municipal    corporations 


*  Light  Railways  Act,  1896.  Report  of  the  Proceedings  of  the  Board 
of  Trade  up  to  December  31,  1903,  and  Proceedings  of  the  Light  Rail- 
way Commissioners  up  to  the  same  date. 


THE   LIGHT  RAILWAYS   ACT,   1896  71 

as  they  may  be  affected  by  public  Bill  Legislation, 
or  by  private  Bill  Legislation  of  general  applica- 
tion to  boroughs;  and  in  other  respects  to  take 
action  in  relation  to  any  other  subjects  in  which 
municipal  corporations  generally  may  be  inter- 
ested." The  second  association  embraces  500  out 
of  a  total  of  800  Urban  District  Councils.  Its 
objects  are:  "To  afford  members  and  officers  of 
Urban  District  Councils  an  opportunity  of  giving 
expression  to  their  opinions,  to  take  action  in  mat- 
ters affecting  their  interests,  to  offer  Parliament, 
the  Local  Government  Board,  and  other  bodies 
the  collective  experience  of  Urban  District  Councils, 
to  take  cognizance  of  Bills  introduced  into  Par- 
liament affecting  Urban  District  Councils  and  the 
working  of  laws  affecting  them,  and  to  promote 
such  measures  as  may  from  time  to  time  be  deemed 
advisable."  * 

The  Light  Railway  Commissioners  will  not  en- 
tertain an  application  for  an  Order  for  a  tramway 
situate  entirely  within  the  area  of  one  local  author- 
ity. They  hold  that  such  applications  should  be 
made  under  the  Tramways  Act,  1870,  or  by  Private 
BilLf 

The  Light  Railway  Commissioners  will  not  issue 


*  The  Municipal  Year  Book,  1904;  and  The  Municipal  Journal, 
April  7  and  July  7,  1905. 

t  Light  Railways  Act,  1896.  Report  of  the  Proceedings  of  the  Board 
of  Trade  up  to  December  31,  1901,  etc.  List  II,  No.  17;  List  IV,  No.  8; 
List  VI,  Nos.  15  and  39. 


72       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

a  Provisional  Order  if  a  railway  company  opposes 
the  Order  on  the  ground  of  competition.  They 
hold  that  in  such  cases  the  matter  should  be  sub- 
mitted to  Parliament.*  The  Commissioners,  in 
the  second  year  of  their  existence,  issued  a  Pro- 
visional Order  for  an  electric  tramway  three  miles 
long,  to  be  built  from  Coatbridge  to  Airdrie.f  These 
towns  are  joined  together  so  far  as  buildings  are 
concerned,  so  that  the  proposed  tramway  would 
have  been  an  urban  tramway  in  the  strict  sense  of 
the  word.  Upon  the  objection  of  the  railway 
companies  concerned,  the  Board  of  Trade  over- 
ruled the  Light  Railway  Commissioners,  and  re- 
fused to  confirm  the  Provisional  Order.  J 

The  Light  Railway  Commissioners  will  not  issue 
a  Provisional  Order  if  all  of  the  local  authorities 
along  the  proposed  tramway  oppose  the  issue.  § 
In  such  a  case  they  will  not  even  inquire  into  the 
merits  of  the  proposed  tramway.  They  have  is- 
sued to  several  local  authorities  conjointly  an  Order 
which  they  had  previously  withheld  from  private 
promoters.  ||  They  have  also  withheld  an  Order 
from  one  set  of  promoters,  and  subsequently  they 
have  issued  practically  the  same  Order  to  another 
set   of   promoters   who   had    secured    the    indorse- 

*  List  V,  Nos.  27  and  49;  List  VI,  No.  40;  and  List  X,  No.  18. 
t  List  III,  No.  30. 

%  Garcke:   Manual  0}  Electrical  Undertakings,  1 899-1900,  p.  469. 
§  List  IV,  Nos.  15  and  35 ;  19,  List  V,  No.  45;  List  VI,  No.  3.     List 
VII,  Nos.  20  and  32,  and  List  VIII,  No.  11. 

II  List  V,  No.  45,  and  List  VIII,  No.  24;  and  List  VII,  No.  18. 


THE   LIGHT   RAILWAYS   ACT,    1896  73 

ment  of  the  local  authorities  by  means  of  a  pri- 
vate bargain  * 

The  Corporation  of  Hastings  indorsed  the  Elec- 
tric Company's  application  for  an  order  for  Hast- 
ings, Bexhill,  and  District.  But  since  the  vote  of 
the  Corporation  had  not  been  unanimous,  and  there 
was  strong  opposition  on  the  part  of  the  residents 
and  ratepayers  of  Hastings,'  the  Commissioners 
"decided  not  to  impose  on  the  town  a  scheme  not 
generally  acceptable."  f 

When  the  local  authorities  are  divided  on  the 
question  whether  a  Provisional  Order  should  be 
granted,  the  Commissioners  ask  the  promoters  to 
prove  that  there  is  a  public  need  or  a  general  public 
desire  for  the  proposed  tramway.  The  promoters 
of  the  Finchley,  Heaton,  and  District  Tramway 
were  unable  to  furnish  such  proof,  though  the 
three  towns,  which  are  suburbs  of  London,  have 
populations  of,  respectively,  24,000,  22,000,  and 
82,000,  and  are  situated  in  a  territory  which  has, 
on  the  average,  one  mile  of  street  railway  track 
for  every  17,500  inhabitants.! 

Edinburgh  has  317,000  inhabitants,  of  whom 
17,400  in  1901  lived  in  the  condition  of  3  to  10 
persons  in  one  room,  while  another  57,200  lived 
in  the  condition  of  5  to  12  persons  in  two  rooms. 
Edinburgh   has   a   municipal   street   railway   route 

*  List  VI,  No.  3,  and  List  VIII,  No.  2. 

t  List  III,  No.  11.  X  List  III,  No.  8. 


74       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

mileage  of  23.5  miles,  and  a  track  mileage  of  43 
miles.  But  the  Light  Railways  Commissioners 
rejected  an  application  for  an  Order  for  6.5  miles 
of  tramway  in  Edinburgh  and  District,  on  the 
ground  that  "a  sufficient  case  had  not  been  made 
out  as  to  the  need  for  this  line  in  the  public  in- 
terest." * 

Glasgow  with  its  suburbs  has  upwards  of  one 
million  inhabitants,  and  less  than  140  miles  of 
street  railway  track.  Glasgow  proper  has  760,000 
inhabitants,  of  whom,  in  1901,  no  less  than  91,200 
were  living  in  the  condition  of  3  to  12  persons  in 
one  room,  while  another  194,300  were  living  in 
the  condition  of  5  to  12  persons  in  two  rooms.  In 
May,  1898,  the  British  Electric  Traction  Co.,  Ltd., 
applied  for  an  Order  for  11.25  rniles  of  electric 
tramway  to  connect  Glasgow  with  the  suburbs 
of  Paisley,  Renfrew,  and  Johnstone.  "At  the  in- 
quiry the  promoters  withdrew  the  portion  giving 
access  to  Glasgow,  and  the  Corporation  of  Paisley 
assumed  an  attitude  of  hostility  to  the  scheme. 
The  Commissioners  were  unable  to  approve  it 
under   the   circumstances."  f 

The  British  Electric  Traction  Co.,  Ltd.,  applied 
for  an  Order  for  a  tramway,  10  miles  in  length, 
in  Morley  District.  The  Company  desired  access 
to  Bradford,  but  since  the  Bradford  municipal 
tramways  are  built  on  a  gauge  of  4  feet,  the  British 

*  List  I,  No.  27.  f  List  IV,  No.  35. 


THE   LIGHT   RAILWAYS   ACT,    1896  75 

Electric  Co.,  whose  tramways  have  a  gauge  of  4/  8", 
could  not  apply  for  running  powers  over  the  mu- 
nicipal tramway.  The  Light  Railway  Commis- 
sioners refused  to  allow  the  company  to  build  its 
own  line  into  Bradford,  and  decided  that  the  com- 
pany and  the  municipality  should  join  tracks  at  a 
point  about  5  furlongs  outside  of  Bradford,  "that 
being  the  least  inconvenient  point  for  a  break 
of  gauge."*  Under  similar  conditions  the  Light 
Railway  Commissioners  refused  to  give  the  Spen 
Valley  Tramway,  12  miles  in  length,  entrance 
to  Bradford.  In  this  case  the  Commissioners 
decided  that  the  break  of  gauge  should  be  at  a 
point  1.25  miles  outside  of  Bradford,  f  Bradford 
has  280,000  inhabitants,  and  68  miles  of  street 
railway  track.  In  November,  1897,  the  British 
Electric  Traction  Co.  applied  for  an  Order  author- 
izing it  to  build  13.25  miles  of  street  railway  in 
Bournemouth,  Poole,  and  Christchurch,  which 
have  populations  of  respectively,  60,000,  19,000, 
and  4000.  The  application  was  rejected  upon  the 
protest  of  the  Corporation  of  Bournemouth  that 
its  streets  were  too  narrow  to  admit  of  the  operation 
of  street  railways.  In  May,  1898,  the  company 
applied  for  an  Order  for  7  miles  of  street  rail- 
way in  Poole,  Christchurch,  and  Branxsome.  The 
Light  Railway  Commissioners  granted  a  Provisional 
Order  for  5.5  miles,  but  the  Board  of  Trade  dis- 

*  List  VII,  No.  30.  f  List  VII,  No.  34. 


76       MUNICIPAL   OWNERSHIP   IN  GREAT   BRITAIN 

allowed  1.75  miles  thereof.  In  1900,  the  Corpora- 
tion of  Bournemouth  obtained  a  charter  under  the 
Tramways  Act,  1870,  for  the  building  of  12.25 
miles  of  street  railway  in  the  very  streets,  which, 
in  1897,  ^  na-d  said  were  too  narrow  to  admit  of 
the  operation  of  street  railways  * 

The  Light  Railway  Commissioners  granted  the 
Dewsbury,  Batley,  and  Bristol  Tramway  Co.,  an 
established  street  railway,  a  Provisional  Order  to 
build  extensions  in  Batley,  which  has  a  population 
of  30,000.  The  Corporation  of  Batley  up  to  the 
time  in  question  had  neither  built  nor  acquired 
tramways.  But  before  the  Board  of  Trade  had 
confirmed  the  Order  issued  by  the  Light  Railway 
Commissioners,  the  Corporation  of  Batley  applied 
for  permission  to  build  a  tramway  in  one  or  two 
miles  of  street  covered  by  the  Provisional  Order 
granted  to  the  Dewsbury,  Batley,  and  Bristol  Co. 
By  way  of  compromise,  the  Board  of  Trade  gave 
the  company  authority  to  build  one  track  of  the 
proposed  double  track  railway,  and  the  corporation 
power  to  build  the  other  one.f 

Application  was  made  for  an  Order  for  5.5  miles 
of  tramway,  to  connect  Bradford  and  Leeds.  The 
Commissioners  issued  an  Order  for  1.5  miles,  the 
distance  between  the  boundary  of  Leeds  and  that 
of   Bradford.     They  denied   entrance   to   Bradford 

*  Traction  and  Transmission,  September,  1903;  and  List  III,  Nos. 
2  and  6,  and  List  IV,  Nos.  6  and  24. 

t  Traction  and  Transmission,  September,  1903. 


THE   LIGHT   RAILWAYS   ACT,   1896  77 

and  Leeds.  Leeds  has  437,000  inhabitants,  and 
78  miles  of  street  railway  track,  owned  by  the  city  * 

In  November,  1898,  Messrs.  Greenwood  and 
Batley,  Ltd.,  applied  for  an  Order  for  6.25  miles 
of  electric  tramway  in  Nelson,  Colne,  and  Traw- 
den,  Lancashire.  None  of  the  towns  in  question 
had  any  tramways,  though  Nelson  and  Colne  had 
respectively  33,000  and  23,000  inhabitants.  There- 
upon the  Borough  of  Nelson  concluded  that  it 
would  be  a  good  speculation  to  execute  that  part 
of  Messrs.  Greenwood  and  Batley' s  scheme  that 
lay  within  the  borough  of  Nelson,  1.25  miles,  and 
thus  to  intercept  a  goodly  share  of  the  profit  on  any 
business  that  Messrs.  Greenwood  and  Batley  might 
build  up  between  Nelson  on  the  one  hand,  and 
Colne  and  Trawden  on  the  other  hand.  The 
Light  Railway  Commissioners  thereupon  issued  to 
Messrs.  Greenwood  and  Batley  an  Order  for  their 
scheme,  "with  the  exception  of  the  portion  in  the 
borough  of  Nelson,  which  was  granted  to  that 
Corporation."  f 

It  will  be  remembered  that  the  Light  Railways 
Act  was  enacted  for  a  period  of  five  years,  which 
period  was  to  expire  on  December  31,  1901.  In 
February,  1901,!  the  Municipal  Journal,  the  organ 
of  the  believers  in  the  policy  of  municipal  owner- 
ship, wrote  as  follows:   "An  attempt  is  to  be  made, 

*  List  III,  No.  3.        t  List  V,  Nos.  30  and  31. 
J  February  22,  1901. 


78       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

we  learn,  to  give  that  legislative  anomaly,  the  Light 
Railways  Act,  a  permanent  place  on  the  Statute 
Book.  .  .  .  The  Government  is  stated  to  be 
'satisfied  with  the  experiment.'  They  are  not  the 
only  folk  who  have  derived  a  measure  of  satisfac- 
tion from  the  Act.  There  are  the  astute  tramway 
promoters,  who  have  found  the  measure  a  very 
effective  means  of  evading  the  restrictions  of  the 
Tramways  Act,  1870,  and  of  freeing  themselves 
of  the  burden  of  the  purchase  clauses.  The  Act 
has  been  employed  for  means  never  contemplated 
by  its  framers,  and  municipal  authorities  would 
be  well  advised  if  they  would  bring  pressure  upon 
the  Government,  either  to  secure  the  abandonment 
of  the  Act,  or  at  least  its  amendment.  Even  the 
Permanent  Secretary  of  the  Board  of  Trade  (Sir 
Courtenay  Boyle)  has  had  to  confess  that  he  is 
unable  to  differentiate  between  a  light  railway  and 
a  tramway.  Perhaps  Mr.  Gerald  Balfour  (Presi- 
dent of  the  Board  of  Trade),  after  he  has  had  a  chat 
with  Sir  Courtenay  Boyle  on  the  matter,  will  not 
be  so  keen  about  the  reintroduction  of  the  Act." 
Notwithstanding  this  warning,  Mr.  Gerald  Bal- 
four, President  of  the  Board  of  Trade,  in  April, 
1 90 1,  brought  in  a  Bill  to  amend  and  to  continue 
Power  of  the  f°r  fiye  years  the  Light  Railways 
Municipal  Cor-  Act.  In  August,  however,  Mr.  Bal- 
porations  four  withdrew  the  Bill,  "simply  and 

solely    because    it    would    have    given    rise    to    a 


THE  LIGHT  RAILWAYS  ACT,   1896  79 

large  amount  of  discussion."  *  Mr.  Balfour's 
statement  was  the  parliamentary  way  of  saying  that 
the  British  Government  was  afraid  to  antagonize 
the  Association  of  Municipal  Corporations.  The 
opposition  to  the  renewal  of  the  Act  was  determined 
and  was  based  upon  dissatisfaction  with  the  pur- 
chase clauses  which  the  Light  Railway  Commis- 
sioners had  embodied  in  the  Orders  which  they 
had  granted  for  tramways.  Since  1901  the  Act  of 
1896  has  been  renewed  each  year  for  a  period  of 
one  year. 

With  only  three  exceptions,  the  Orders  granted 
for  tramways  down  to  December  31,  1901,  author- 
ized the  local  authorities  to  purchase  the  tramways 
after  a  stated  number  of  years  on  the  basis  of  "fair 
market  value  as  a  going  concern,  but  without  any 
allowance  for  .compulsory  purchase."  The  most 
common  arrangement  was  25  to  30  years;  and  in 
two  cases  it  was  respectively  40  years  and  42  years. 

In  the  case  of  the  Hartlepool  Electric  Tramways 
Co.,  Ltd.,  the  Borough  of  West  Hartlepool  had 
succeeded  in  getting  power  to  purchase  at  the  ex- 
piration of  fourteen  years,  on  the  basis  of  the  Tram- 
ways Act,  1870;  and  in  the  case  of  the  West  Hartle- 
pool Light  Railway  Co.,  the  Borough  had  obtained 
the  right  to  purchase  on  the  expiration  of  twenty- 
one  years,  on  the  basis  of  the  Tramways  Act,  1870. 

*  Hansard's  Parliamentary  Debates,  April  1,  1901,  p.  379,  and  August 
14,  p.  856. 


80       MUNICIPAL  OWNERSHIP  IN   GREAT   BRITAIN 

In  the  case  of  the  Bath  and  District  Light  Rail- 
way, the  local  authorities  obtained  power  to  pur- 
chase at  the  expiration  of  thirty-two  years,  on  the 
basis  of  the  Tramways  Act,  1870.  In  this  case  the 
company  undertook  to  effect  street  widenings  that 
would  cost  upward  of  $57,000.  It  obtained  a 
charter  for  a  route  mileage  of  13.5  miles. 

One  of  the  first  Orders  issued  after  the  continu- 
ation of  the  Light  Railways  Act,  in  1901,  was  that 
of  the  Donelly  and  District  Tramway  Co.  It 
authorized  compulsory  purchase  at  the  expiration 
of  seven  years,  or  at  the  end  of  each  subsequent 
period  of  seven  years.  The  price  to  be  paid  was  an 
amount  equal  to  the  total  capital  expenditure  prop- 
erly incurred  for  the  purposes  of  the  tramway,  pro- 
vided that  if  purchase  should  be  effected  before  the 
expiration  of  twenty-eight  years,  there  should  be 
added  a  bonus  sufficient  to  raise  the  average  divi- 
dend for  the  period  of  operation  by  the  company 
to  6  per  cent  a  year. 

Early  in  1902  the  British  Institution  of  Electrical 
Engineers  appointed  a  committee  of  twelve  to 
report  upon  the  legislative  policy  toward  the  elec- 
Science  and  in-  trical  industries.  The  committee 
dustry  no  Match  comprised,  among  others,  Lord  Kel- 
for  Politics  vmj    jn    the    fieW    of    electricity    the 

first  scientist  of  Great  Britain,  and  perhaps  of 
the  world;  Jno.  Perry,  F.R.S.,  a  past  President 
of  the  society;   S.  P.  Thompson,  F.R.S.,  and  past 


THE   LIGHT   RAILWAYS   ACT,   1896  81 

President  of  the  Physical  Society,  the  Rontgen 
Society,  and  the  Institution  of  Electrical  Engineers ; 
Sir  Michael  Foster,  one  of  the  world's  foremost 
physiologists;  and  Major  General  Webber,  retired 
Royal  Engineers,  founder  and  past  President  of 
the  Institution  of  Electrical  Engineers.  The  Com- 
mittee met  eleven  times,  took .  evidence,  and  passed 
nine  resolutions  "setting  forth  that  the  electrical 
industry  had  suffered  greatly  from  restrictive  legis- 
lation, .  .  .  from  the  veto  exercised  by  the  local 
authorities,  .  .  .  and  from  the  regulations  imposed 
by  the  Government  departments."  The  Committee 
asked  Lord  Salisbury,  the  Prime  Minister,  to  hear 
them,  but  they  were  referred  to  Mr.  Gerald  Balfour, 
President  of  the  Board  of  Trade. 

Mr.  Swinburne,  President  of  the  Institution  of 
Electrical  Engineers,  was  the  spokesman  of  the 
deputation,  consisting  of  the  entire  committee.  He 
said :  "They  had  formed  a  committee  to  see  of  what 
assistance  they  could  be  in  removing  the  restrictions 
on  the  electrical  industry,  and  they  came  to  the  con- 
clusion that  they  might  act  as  an  advisory  committee 
to  the  Board  of  Trade  in  dealing  with  the  Electric 
Lighting  Acts,  the  Tramways  Act,  and  the  Light 
Railways  Act  which  at  present  hampered  industry. 
Electrical  enterprises  should  be  limited  by  economical 
considerations  only,  and  not  by  local  boundaries; 
and  should  not  be  interfered  with  by  local  authori- 
ties, who  could  veto  any  enterprise  that  touched  their 


82      MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

district.  They  did  not  oppose  municipal  trading, 
but  they  objected  to  the  abuse  of  the  powers  pos- 
sessed by  the  local  authorities.  They  wanted  to 
prevent  the  pure  unreasoning  obstruction  by  local 
authorities  who  got  provisional  orders  (for  electric 
lighting)  merely  to  prevent  other  people  from  coming 
into  the  district.  They  considered  the  compulsory 
purchase  as  an  incubus  on  the  industry ;  and  further, 
the  expense  of  Parliamentary  procedure  arrested 
the  progress  of  the  electrical  as  well  as  other  engineer- 
ing industries.  The  staff  of  the  Board  of  Trade 
which  dealt  with  the  regulation  of  the  supply  of 
electricity  ought  to  be  strengthened,  and  nothing 
less  than  the  Royal  Commission  was  required  to 
deal  with  the  whole  question  of  electrical  legislation." 
Mr.  Balfour,  President  of  the  Board  of  Trade, 
replied:  "He  fully  recognized  the  importance  of  the 
subject,  and  to  a  large  extent  sympathized  with  the 
deputation.  He  was  afraid  that  it  was  undeniable 
that  the  electrical  industry  in  this  country  was  behind 
America  and  Germany,  and  perhaps  some  other  of 
the  continental  countries.  He  did  not  contend  that 
legislation  applicable  to  the  electrical  industry  was 
not  susceptible  of  considerable  amendment,  or  that 
the  regulations  were  not  restrictive  in  some  instances, 
or  that  the  local  authorities  had  not  abused  the 
powers  conferred  upon  them  by  Parliament,  but  it 
did  not  account  fully  for  the  backwardness  of  this 
country  as  compared  with  other   countries.    This 


THE   LIGHT   RAILWAYS   ACT,    1896  83 

must  be  remembered,  that  America  was  a  new  coun- 
try very  sparsely  populated,  with  comparatively  few 
established  interests  to  contend  with,  whereas  this 
was  an  old  country  with  a  very  dense  population, 
with  a  large  number  of  strongly  established  interests, 
which  produced  a  very  strongly  developed  conserv- 
atism. It  was  these  fundamental  conditions  rather 
than  any  legal  enactments  which  retarded  the  elec- 
trical industry  in  Great  Britain  as  compared  with 
other  countries.  It  appeared  that  the  really  im- 
portant question  was  not  so  much  that  of  any  im- 
pediments thrown  directly  by  the  Legislature  in  the 
way  of  the  development  of  the  electrical  industry 
as  the  power  which  the  Legislature  had  given  the 
local  authorities  to  veto  schemes.  With  respect  to 
this  matter  they  had  to  consider  two  branches  of  the 
subject,  —  namely,  the  electric  supply  and  electric 
traction.  In  the  case  of  tramways,  so  far  as  these 
matters  were  still  determined  by  the  provisions  of 
the  Act  of  1870,  the  local  authority  had  an  absolute 
veto  upon  measures  proposed  to  be  promoted  by 
means  of  Private  Bills.  To  some  extent  the  evils 
following  from  that  condition  of  things  had  been 
remedied  by  the  adoption  in  many  cases  of  the 
light  railway  procedure  even  where  a  scheme  was  in 
the  proper  sense  of  the  term  a  tramway.  But  it 
was  true  that  the  Light  Railway  Commissioners  and 
the  Board  of  Trade  had  considered  themselves  more 
or  less  bound  by  the  regulations  laid  down  in  the 


84       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

Tramways  Act  and  the  Standing  Orders  of  the  House 
of  Commons.  He  did  not  think  they  had  gone  the 
length  of  giving  the  local  authorities  absolute  veto, 
but  no  doubt  they  were  influenced  by  those  legal 
provisions.  With  respect  to  traction,  the  matter 
had  been  investigated  recently  by  a  Departmental 
Committee,  on  which  both  the  promoters  and  the 
local  authorities  were  represented.  A  Bill  had  been 
drafted  which  would  go  very  far  to  meet  all  the 
reasonable  objections  that  had  been  urged  against 
the  present  powers  of  local  authorities.  But  they 
should  not  conceal  from  themselves  that  the  local 
authorities  represented  a  very  great  power,  and  they 
quite  saw  that  it  was  strongly  to  their  interest  to 
possess,  if  not  an  absolute  veto,  at  all  events  a  locus 
standi,  which  would  enable  them  to  make  their  views 
powerfully  felt.  Only  the  other  day  an  attempt 
was  about  to  be  made  to  alter  this  Standing  Order 
in  the  House  of  Commons,  but  it  was  abandoned 
because  of  this  powerful  opposition.  That  illus- 
trated the  difficulty  of  dealing  with  this  question  so 
long  as  local  authorities  took  so  strong  a  view  as 
to  the  power  which  ought  to  be  reserved  to  them  in 
connection  with  this  enterprise.  In  spite  of  that  he 
had  hopes  that  the  compromise  which  had  been 
arrived  at  by  the  Departmental  Committee,  and 
which  had  been  embodied  in  a  Bill,  would  be  fairly 
satisfactory  to  both  parties.  As  regards  the  electric 
supply,    the    case    was    somewhat    different.    The 


THE   LIGHT   RAILWAYS   ACT,    1896  85 

House  of  Commons  Committee  of  1898  on  Electric 
Supply  had  made  a  series  of  recommendations; 
but  legislation  would  be  required  to  enable  the 
Board  of  Trade  to  adopt  those  recommendations. 
The  Board  of  Trade  had  also  got  a  Bill  ready  to 
give  effect  to  those  recommendations;  but  he  was 
afraid  that  he  should  not  be  able  to  give  effect  to 
either  of  those  Bills  this  session ;  but  they  would  do 
so  at  the  earliest  moment.  The  Board  of  Trade  was 
as  anxious  as  the  deputation  to  secure  that  public 
interests  should  be  properly  served  by  the  develop- 
ment of  the  electric  industry.  With  regard  to  the 
appointment  of  a  Royal  Commission,  he  could  not 
pledge  himself,  but  he  must  consult  his  colleagues 
in  the  cabinet."  * 

It  is  not  necessary  to  draw  attention  to  the  fact 
that  the  admissions  made  by  Mr.  Balfour  in  the  latter 
part  of  his  speech  as  to  the  powerful  opposition  of 
the  municipalities,  actuated  by  greed  or  gain,  to  the 
limitation  of  the  local  veto,  are  quite  inconsistent 
with  the  statement  made  in  the  first  part  of  the 
speech  to  the  effect  that  the  backwardness  of  Great 
Britain  was  due  to  the  conservatism  produced  by 
established  interests.  One  can  scarcely  dignify 
municipal  greed  to  the  extent  of  calling  it  a  vested 
interest.  Nor  will  any  one  seriously  contend  that 
the  owners  of  private  carriages,  the  proprietors  of 

*  The  Times,  June  19,  1902;  Engineering,  June  20,  1902;  and 
Traction  and  Transmission,  October,  1904. 


86       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

the  fashionable  retail  shops,  the  proprietors  of 
omnibuses  and  cabs,  and  the  owners  of  fine  resi- 
dences, who  alone  can  be  said  to  represent  vested 
interests  in  this  connection,  would  have  been  able  to 
paralyze  in  succession  the  development  of  the  horse 
tramway,  the  electric  light,  the  electric  tramway,  the 
telephone,  and  the  electricity-in-bulk  power  plant. 
The  advocates  of  municipal  trading  in  franchises, 
who  developed  the  doctrine  that  the  profits  made  by 
public  service  companies  that  use  the  streets  belong 
to  the  public,  and  the  politicians  who  took  up  that 
doctrine  for  the  purpose  of  magnifying  their  office 
alone  are  responsible  for  the  backwardness  of  Great 
Britain  in  every  branch  of  the  electrical  industries 
but  one  —  the  ocean  cable  industry,  which  uses  the 
bottom  of  the  high  seas,  and  has  not  yet  been  regu- 
lated by  Parliament. 

At  the  close  of  June,  1905,  the  British  Government 
had  not  yet  summoned  courage  to  ask  Parliament 
to  remove  the  restrictions  which  for  thirty-five  years 
have  paralyzed  the  development  of  the  street  railway 
industry  by  private  initiative. 


CHAPTER  IV 

THE  UNITED  KINGDOM'S  LACK  OF  STREET  RAILWAYS 

The  following  table  shows  that  in  1902,  the  year 
in  which  the  Federal  Government  took  a  census  of 
the  street  railways,  41  per  cent  of  the  towns  in  the 


United  Kingdom 

United  States 

Street  Railway  Facilities  of 
Cities  of  Various  Sizes 

Number 

Proportion 
thereof  sup- 
plied      with 
street      rail- 
ways in  1903 

Number 

Proportion 
thereof  sup- 
plied      with 
street      rail- 
ways in  1902 

Cities  with  a  population  of: 

V 

10 

5,000  and  less  than    6,000 

95 

II 

147 

41 

6,000  and  less  than    7,000 

75 

13 

98 

52 

7,000  and  less  than    8,000 

60 

13 

75 

61 

8,000  and  less  than    9,000 

43 

9 

45 

71 

9,000  and  less  than  10,000 

44 

16 

5° 

76 

10,000  and  less  than  12,000 

84 

17 

62 

84 

12,000  and  less  than  15,000 

9* 

31 

75 

95 

15,000  and  less  than  20,000 

75 

30 

72 

100 

20,000  and  less  than  30,000 

82 

5° 

78 

100 

30,000  and  less  than  40,000 

47 

64 

43 

100 

40,000  and  less  than  50,000 

3° 

80 

13 

100 

50,000  and  less  than  60,000 

13 

100 

17 

100 

60,000  and  less  than  70,000 

13 

92 

7 

100 

United  States  having  a  population  of  5000  and  less 
than  6000  were  supplied  with  street  railways;   that, 

87 


88       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

with  the  increase  of  towns,  the  percentage  supplied 
with  street  railways  increased  regularly  and  rapidly; 
and  that  all  towns  and  cities  of  15,000  and  more  in- 
habitants had  street  railways.  In  the  United  King- 
dom, on  the  other  hand,  in  the  year  1903,  only  9  to 
13  per  cent  of  the  towns  of  5000  and  less  than  9000 
inhabitants  had  street  railways;  for  towns  of  12,000 
and  less  than  20,000  the  percentage  in  question  was 
30 ;  and  not  until  cities  of  70,000  and  more  inhabit- 
ants were  reached  could  one  count  on  finding  in 
every  instance  a  street  railway. 

Turning  from  the  question  of  the  size  of  the  towns 
and  cities  to  which  the  street  railways  have  penetrated 
in  the  two  countries  under  comparison,  to  the  ques- 
tion of  the  respective  extents  of  the  street  railways 
in  those  towns  and  cities  which  have  street  railways, 
one  finds  even  a  greater  disproportion  between  con- 
ditions in  the  United  States  and  the  United  King- 
dom. The  subjoined  table  shows  that  in  the  United 
States,  in  the  year  1902,  in  a  total  of  530  cities, 
groups  of  cities  and  towns,  and  groups  of  towns, 
there  was:  in  24.7  per  cent  of  the  cases  more  than 
one  mile  of  street  railway  track  for  each  1000  people ; 
in  32  per  cent  of  the  cases  one  mile  of  street  railway 
track  for  each  1000  to  1499  people;  in  21.9  per  cent 
of  the  cases  one  mile  of  track  for  each  1500  to  1999 
people;  and  in  10.7  per  cent  of  the  cases,  one  mile 
of  track  for  each  2000  to  2599  people.  In  the  United 
Kingdom,  on  the  other  hand,  there  was,  in  1903, 


LACK   OF   STREET   RAILWAYS 


89 


no  case  of  one  mile  of  track  for  each  1500  people  or 
less.  The  most  common  ratio  between  street  rail- 
way trackage  and  population  was :  one  mile  of  track 
for  each  5000  to  5999  people,  and  one  mile  for  each 
7000  to  7999  people,  the  next  most  common  ratio 
was  one  mile  of  track  for  each  4000  to  4999  people, 
and  each  13,000  to  19,999  people;  the  third  most 
common  ratio  was  one  mile  for  each  3000  to  3999 
people ;  and  the  fourth  most  common  ratio  was  one 
mile  for  each  11,000  to  11,999. 


United    States 

United  King- 

1902 

dom,  1903 

Ratio  between  Street  Railway  Trackage 

530  cities,  groups 

158  cities,  groups 

and  Population 

of  cities 

of  cities 

and  towns,  and 

and  towns,  and 

groups   of  towns 

groups  of   towns 

One  mile  of  street  railway  track  for  : 

/o 

/0 

Less  than  iooo 

24.7 

O 

Each    1,000  to 

1,499  people 

32.0 

O 

Each    1,500  to 

21.9 

i-9 

Each    2,000  to 

10.7 

5-7 

Each    2,600  to 

3-8 

3-2 

Each    3,000  to 

2.8 

7.6 

Each    4,000  to 

4,999  people 

2.3 

10. 1 

Each    5,000  to 

5,999  people  "I 

12.7 

Each    6,000  to 

6,999  people  1 

i-5 

8.7 

Each    7,000  to 

7,999  people  [ 
8,999  people  J 

12.7 

Each    8,000  to 

3-2 

Each    9,000  to 

0 

5-1 

Each  10,000  to 

0 

2-5 

Each  11,000  to 

0 

6-3 

Each  12,000  to 

0 

44 

Each  13,000  to 

0 

IO.I 

Each  21,000 

0 

2-5 

Each  22,000  to 

0 

3-2 

These  figures,  it  is  true,  relate  to  the  year  1903. 
On  the  other  hand,   there  has  been  no  material 


90       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

change  in  conditions  since  that  year,  as  appears 
from  the  fact  that  the  total  street  railway  route 
mileage  of  the  United  Kingdom  increased  only  from 
1772  miles,  in  June,  1903,  to  1840  miles,  in  March, 
1904.  The  subjoined  table  elucidates  in  detail  this 
subject  of  the  ratio  between  street  railway  trackage 
and  population. 

In  June,  1902,  there  were  in  the  United  States 
16,652  route-miles  of  street  railway,  and  22,589 
track-miles  of  street  railway.  Not  less  than  14,000 
track-miles  thereof  were  located  within  urban  limits. 
The  United  Kingdom  has  practically  the  same 
urban  population  as  the  United  States ;  *  therefore  it 
should  have  about  the  same  urban  street  railway 
track  mileage,  namely  14,000  miles. 

In  March,  1904,  the  total  urban  and  interurban 
street  railway  route-mileage  of  the  United  Kingdom 


*  Urban  Population 

Number 

United  Kingdom 

1 90 1 
Aggregate  popu- 
lation 

Number 

United  States 

1900 
Aggregate  popu- 
lation 

Cities  with  a  population  of: 
250,000  and  upward      .     . 
100,000     and     less     than 

50,000     and      less      than 

20,000      and      less      than 

10,000      and      less      than 

13 

26 

47 
159 
250 

9,691,000 
3,833,000 
3,371,000 
4,968,000 
3412,000 

'5 
23 

40 

135 
209 

10,936,000 
3,272,000 
2,709,000 
3,971,000 
3,251,000 

Totals 

495 

25,275,000 

422 

24,139,000 

LACK   OF   STREET   RAILWAYS 


91 


was  1840  miles,*  while  the  track-mileage  did  not 
exceed  3200  miles.  From  these  figures  it  follows 
that  the  people  living  in  the  cities  and  towns  of  the 
United  Kingdom  have  at  their  service  less  than  one- 
quarter  of  the  street  railway  facilities  that  the  people 
have  who  live  in  the  cities  and  towns  of  the  United 
States.f 

In  an  earlier  chapter  it  was  shown  that  the  city 
population  of  the  United  Kingdom  in  1880  had  less 
than  one-fifth  of  the  street  railway  facilities  that  the 
city  population  of  the  United  States  had;  and  that 
in  1890  it  had  considerably  less  than  one-third  of 
the  facilities.  It  has  just  appeared  that  in  1904  it 
had  less  than  one-fourth  of  the  facilities.  In  other 
words,  the  paralysis  of  private  enterprise  under  the 
application  of  the  doctrine  that  the  profits  to  be  made 
out  of  the  so-called  public  service  industries  that  use 
the  public  streets  belong  to  the  general  public  and 
not  to  "private  speculators"  has  been  complete  and 


*  United  Kingdom,  Match,  1904 

United  States,  Jane,  1902 

Method  of  Traction 

Route-mileage 

Method  of  Traction 

Track-mileage 

Cable 

I462 

109 

30 

4 
235 

Electric    .... 
Cable 

2I,920 

259 

241 

O 

170 

1840 

22,590 

t  The  slowness  of  the  growth  of  transportation  facilities  is  indicated 
by  the  fact  that  data  received  since  the  text  was  put  in  type  show  that  in 
January,  1906,  the  route  mileage  was  1970. 


92       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

permanent.  Equally  complete  and  permanent  has 
been  the  failure  of  the  municipalities  to  fill  the  void 
which  they  had  created  by  paralyzing  private  enter- 
prise. 


CHAPTER  V 

GLASGOW 

In  1870  a  Private  Act  of  Parliament  gave  a  com- 
pany power  to  build  and  operate  street  railways  in 
Glasgow.  In  that  same  year  the  city  of  Glasgow 
acquired  the  powers  of  the  company,  and  accordingly 
it  has  always  been  the  sole  builder  of  street  railways 
in  Glasgow.  In  1872  the  city  leased  the  tramways 
for  twenty-one  years  to  the  Glasgow  Tramway  and 
Omnibus  Co. 

In  1887  that  company  asked  for  an  extension  of  its 
lease,  offering  to  adopt  "motor  (mechanical)  trac- 
tion of  some  kind"  and  to  increase  its  rolling  stock.* 
But  the  city  failed  to  offer  terms  that  the  company 
could  accept.  The  company  had  leased  only  the 
tracks  and  had  been  obliged  to  provide  the  barns, 
horses,  and  rolling-stock,  the  city  being  under  no 
obligation  whatever  to  purchase  any  of  the  afore- 
said equipment  upon  the  expiry  of  the  company's 
lease.  When  it  became  certain,  in  1887,  that  the 
city  would  not  renew  the  lease  in  1893,  and  remained 
very  uncertain  whether  the  city  would  purchase  the 
company's  equipment,  the  company  was  compelled 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
q-  344i»  3484,  and  3488. 

93 


94       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

to  practice  the  utmost  economy  in  the  maintenance 
of  that  equipment  — that  is,  it  was  obliged  to  withdraw 
as  much  of  its  capital  as  possible  by  letting  the  equip- 
ment run  down. 

When  the  Glasgow  Tramway  and  Omnibus 
Co.  was  organized  in  1873,  it  not  only  took  a 
lease  of  the  tramways,  but  also  bought  up,  at  a  cost 
of  $750,000,  the  business  of  all  omnibus  proprietors 
in  the  city  and  suburbs,  and  so  acquired  a  monopoly. 
The  company's  articles  of  association,  which  were 
approved  by  the  city,  provided  for  the  carrying  on,  at 
the  termination  of  the  tramway  lease,  of  the  business 
of  omnibus  proprietors.  But  when  the  city  ter- 
minated the  tramway  lease,  it  refused  to  buy  any  of 
the  company's  equipment,  unless  the  company  should 
agree  not  to  c6mpete  with  the  city  tramways.  The 
company  declined  to  make  any  such  agreement,  and 
the  city  refused  to  purchase  any  of  the  company's 
barns,  horses,  or  cars.* 

At  a  total  cost  of  $1,955,000  the  city  now  built  new 
barns  and  horse  cars,  and  purchased  between  3500 
and  4000  horses.  The  city  at  this  time,  1893,  was 
City  assumes  convinced  that  some  form  of  mechani- 
operaiion  of        caj  haulage  or  propulsion  would  be  the 

Tramways  in  .        ,  ,   .  e     ,. 

fusing  Horse  haulage  or  propulsion  of  the  near 
Power  future,  but  it  could  not  make  up  its 

mind  whether  the  motive  force  would  be  compressed 
air,  oil,  cable,  or  electricity.      As  for  electric  trac- 

*  Traction  and,  Transmission,  1902,  p.  159. 


GLASGOW  95 

tion,  the  city  was  convinced  that  the  overhead 
trolley  was  doomed,  and  it  was  entirely  unwilling  to 
consider  the  proposal  to  use  the  overhead  trolley 
temporarily. 

In  1898,  when  the  horse  car  had  all  but  disappeared 
in  the  United  States,  the  city  of  Glasgow,  by  way  of 
experiment,  equipped  electrically  2.5  miles  of  street 
railway.  In  January,  1899,  it  resolved  to  equip  its 
whole  system  electrically,  and  in  April,  1901,  electric 
traction  was  inaugurated.  To  repeat,  while  electric 
traction  still  was  an  experiment,  the  city  refused  to 
offer  the  lessee  company  terms  that  would  justify 
the  company  in  trying  and  promoting  the  experi- 
ment ;  nor  did  the  city  itself  contribute  anything  to 
the  establishment  of  the  new  mode  of  traction.  It 
merely  copied,  at  a  safe  distance  of  ten  or  a  dozen 
years,  the  results  attained  by  private  enterprises  in 
the  United  States. 

The  city  of  Glasgow  always  has  been  one  of  the 
most  determined  opponents  of  any  proposal  to  modify 
the  law  limiting  the  franchises  of  street  railway 
-,  . .         companies  to  twenty-one  years.     Yet 

Glasgow  opposes  r  J  J 

Perpetual  Fran-  in  July,  1901,  Glasgow  had  a  clean 
chises  —  except  record  of  refusal  to  build  tramways 
jortsej  .^^  any  suburb  of   Glasgow  unless 

that  suburb  consented  that  Glasgow  should  have  a 
perpetual  charter  for  the  street  railway  built.*    Such 

*  Hansard's  Parliamentary  Debates,  July  23,  1901,  p.  1250,  Lord 
Balfour  of  Burleigh,  Secretary  for  Scotland,  and  the  Earl  of  Morley, 


96       MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

perpetual  charters  the  city  obtained  in  1870,  1875, 
1879,  1885,  1893,  1899,  and  1901. 

In  1889,  the  close  of  the  horse  railway  era  in  the 
United  States,  the  city  of  Glasgow  had  built  61  miles 
of  street  railway  tracks  in  31  miles  of  street.  In 
that  same  year,  Boston,  with  its  suburbs,  containing 
about  10  per  cent  fewer  people  than  Glasgow,  had 
231  miles  of  street  railway  track.  In  May,  1904, 
Glasgow  and  its  suburbs  had  146  miles  of  street  rail- 
way track,  or  one  mile  for  each  6700  people ;  at  that 
same  time  Boston  and  its  suburbs  had  one  mile  of 
track  for  each  2300  people,  or  almost  three  times  the 
facilities  of  Glasgow. 

It  is  not  necessary,  however,  to  go  to  the  United 
States  for  comparisons  of  this  kind.  Dublin,  Ire- 
land, is  rather  a  sleepy  town,  with  a  residential 
rather  than  an  industrial  population,  numbering 
353,000  people,  suburbs  included.  In  December, 
1904,  Dublin  had  one  mile  of  street  railway  track  for 
each  3500  people.  In  1894,  Mr.  W.  M.  Murphy, 
Chairman  of  the  Dublin  United  Tramways,  who, 
since  1868,  has  been  a  builder  of  tramways  in  all 
parts  of  the  United  Kingdom,  as  well  as  on  the  Con- 
tinent, went  to  the  United  States  to  investigate 
electric  traction,  "saw  that  the  thing  was  not  only 
practicable  but  profitable,  that  it  had  come  to  stay 
and  was  a  perfect  success,  so  far  as  one  could  see, 

Lord  Chairman  of  Committees;  and  Report  from  the  Joint  Select  Com- 
mittee on  Municipal  Trading,  1900,  q.  3959  and  2825. 


GLASGOW  97 

in  the  United  States."  The  deadly  Tramways  Act, 
1870,  does  not  extend  to  Ireland,  and  its  provisions 
had  not  been  incorporated  in  the  earlier  charters 
granted  to  the  Dublin  United  Tramways,  though 
they  had  been  incorporated  in  the  later  ones.  In 
1894,  Mr.  Murphy  proposed  to  the  city  of  Dublin 
to  equip  his  street  railway  for  electric  traction  if  the 
city  would  give  him  a  blanket  franchise  for  forty- 
two  years  from  1894;  the  city  to  have  the  right  to 
purchase  at  the  end  of  that  period  at  cost  of  replace- 
ment plus  33  per  cent  for  good-will  allowance.  In 
addition,  Mr.  Murphy  offered  to  make  certain  annual 
way-leave  payments,  which  now  amount  to  $70,000 
a  year  for  100  miles  of  track.  As  soon  as  the  ad- 
herents of  municipal  ownership  in  England  and 
Scotland  heard  of  the  proposal,  they  sent  their 
agents  to  Dublin  to  work  up  a  public  sentiment 
against  the  adoption  of  the  proposal,  and  thus  pre- 
vented Mr.  Murphy  from  getting  the  approval  of 
the  city  before  late  in  1895.  In  1896  electric  trac- 
tion was  begun  in  Dublin.* 

It  is  well,  whenever  opportunity  affords,  to  con- 
trast the  promises  and  protestations  of  the  adherents 
Contrast  between  of  municipal  ownership  with  their 
Promises  and        achievements.     In    1870,   before   the 

Achievements  dty     of    GlasgQW     had    acquired    the 

rights  of  the  company  that  had  obtained  a  street  rail- 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
q.  1436  to  1447,  J497»  and  15l6- 


98       MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

way  franchise,  the  city  of  Glasgow  sent  Mr.  A. 
Munro  to  represent  it,  as  well  as  Edinburgh  and 
Dundee,  before  the  Parliamentary  Committee  on 
the  Tramways  Bill.  Before  that  committee,  Mr. 
Munro  said :  "In  Glasgow  we  are  very  much  limited 
in  space ;  our  population  is  far  too  dense  for  the  area 
on  which  the  city  is  built.  We  are  now  making 
arrangements  for  the  purchase  of  large  portions  of 
ground  beyond  the  municipal  area,  for  the  erection 
of  houses  for  the  poorer  classes  of  citizens;  if  the 
tramways  were  in  the  hands  of  the  corporation,  they 
could  be  carried  to  such  a  distance  as  to  bring  the 
poorer  people  to  their  work  at  low  fares,  or  they 
could  stipulate  with  the  contractor  (lessee  in  the  case 
of  the  tramways  being  leased)  to  run  certain  carriages, 
at  certain  hours  of  the  day,  at  low  rates."  * 

The  census  of  iqoi  showed  that  Glasgow  proper 
had  a  population  of  760,000 ;  and  that  there  were  in 
Glasgow  proper  91,205  overcrowded  persons  living 
in  the  condition  of  3  to  12  persons  in  a  room,  and 
194,284  overcrowded  persons  living  in  the  condition 
of  5  to  12  persons  in  2  rooms.f    The  number  of  over- 

*  Report  of  the  Committee  on  Tramways  Bill,  1870,  q.  602,  637,  and 
648. 

t  Overcrowding  in  Glasgow  in  1901 

26,049  overcrowded  persons  living  3  to  I  room. 

25,276  overcrowded  persons  living  4  to  I  room. 

19,535  overcrowded  persons  living  5  to  1  room. 

11,100  overcrowded  persons  living  6  to  1  room. 

5,642  overcrowded  persons  living  7  to  1  room. 

2,336  overcrowded  persons  living  8  to  1  room. 

1,267  overcrowded  persons  living  9  to  12  to  1  room. 


GLASGOW 


99 


crowded  persons  living  in  one  room  had  increased 
from  90,900  in  1891  to  91,200  in  1901 ;  and  the 
number  of  overcrowded  persons  living  in  two  rooms 
had  increased  from  187,000  in  1891  to  194,300  in 
1 90 1.  In  the  meantime  the  total  population  had 
increased  from  565,000  in  1891  to  760,000  in  1901. 

Thus  far  the  corporation  of  Glasgow  has  failed 
absolutely  to  use  the  electric  street  railway  for  the 
purpose  of  "  suburbanizing "  the  population.  It  has 
used  it  only  for  the  purpose  of  putting  money  into 
the  city  treasury  and  for  the  purpose  of  "  magnify- 
ing the  office"  of  the  municipal  politician. 

Let  us  stop  for  a  moment  to  consider  what  the 
"suburbanizing"  of  the  population  would  mean  for 
the  health  and  happiness  of  the  people  of  Glasgow. 
In  1 90 1  the  death-rate  per  1000  inhabitants  of  Glas- 
gow was:  1 1.2  for  the  dwellers  in  houses  or  tene- 
ments of  4  or  more  rooms;  13.7  for  the  dwellers  in 
tenements  of  3  rooms;    21.3  for  the  dwellers  in 


6,105 
57.258 
51,016 

37.784 

23,301 

11,720 

4,664 

2,436 


overcrowded 
overcrowded 
overcrowded 
overcrowded 
overcrowded 
overcrowded 
overcrowded 
overcrowded 


persons 
persons 
persons 
persons 
persons 
persons 
persons 
persons 


living  5  to  2 
living  6  to  2 
living  7  to  2 
living  8  to  2 
living  9  to  2 
living  10  to  2 
living  11  to  2 
living  12  to  2 


rooms, 
rooms, 
rooms, 
rooms, 
rooms, 
rooms, 
rooms, 
rooms. 


Year 

Overcrowded   One-room 
Dwellers 

Overcrowded    Two-room 
Dwellers 

Total 
Population 

1871 
1891 
1 901 

115,300 
90,900 
91,200 

145,500 
187,000 
194,300 

477,000 
565,000 
760,000 

100    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

tenements  of  2  rooms;  and  32.7  for  the  dwellers  in 
one-room  tenements.  The  death-rates  from  res- 
piratory diseases  were,  respectively:  2.7,  3.6,  6.4, 
and  10.*  If  the  reader  be  inclined  to  object  that 
these  figures  are  not  conclusive,  on  the  ground  that 
crowding  is  only  one  of  the  evils  of  poverty,  all  of 
which  make  for  an  increased  death-rate,  let  him 
consider  the  following  figures.  In  the  decade  from 
1837  to  1846,  the  mortality  from  lung  diseases  in  the 
four  branches  of  the  British  Army  ranged  from  5.65 
per  1000  in  the  cavalry  of  the  line  to  11.9  per  1000 
in  the  Foot  Guards.  The  only  decided  difference 
between  the  various  arms  was  the  condition  of  over- 
crowding in  the  barracks.  Again,  in  the  seven  years 
from  1864  to  1870,  the  mortality  from  lung  diseases 
in  the  cavalry  of  the  line  was  1.41  only,  while  the 
mortality  in  the  Foot  Guards  was  only  2.30.  The 
only  decided  difference  in  the  conditions  of  these 
respective  arms  in  the  two  periods  from  1837  to 
1846  and  1864  to  1870  was  the  increased  cubic 
space  per  man  in  the  barracks.f 

While  the  city  of  Glasgow's  policy  of  operating 
street  railways  primarily  as  a  money- making  machine 
has  been  little  short  of  disastrous,  so  far  as  the  well 
being  of  tens  of  thousands  of  citizens  is  concerned, 


*  A.  K.  Chalmers,  Medical  Officer  of  Health  for  the  City  of  Glasgow: 
The  Death-Rale  in  our  Apartment  Houses:  An  Enquiry  based  on  the 
Census  Returns  of  iqoi. 

t  J.  F.  J.  Sykes:  Public  Health  and  Housing;  being  the  Melroy  Lec- 
tures delivered  before  the  Royal  College  of  Physicians,  London,  1901. 


GLASGOW  101 

it  has  not  been  successful  even  from  the  view-point 
of  public  finance.  In  1902-3  the  street  railways 
yielded  a  gross  revenue  of  $3,271,000;  out  of  that 
revenue  they  paid  in  taxes  $91,000,  contributed 
to  the  "Common  Good"  $125,000,*  and  paid  in  to 
the  sinking  fund  for  reduction  of  the  capital  debt 
the  sum  of  $216,500.  That  made  a  total  payment 
"to  the  public  benefit  account"  of  $432,500,  or  13. 1 
per  cent  of  the  gross  earnings,  or  $0.44  per  head  of 
population  served  by  the  Glasgow  tramways.  The 
Boston  Elevated  Railway  Co.,  serving  a  popula- 
tion not  quite  so  large  as  that  of  Glasgow  and  its 
suburbs,  has  earnings  of  about  $12,000,000  and  pays 
"to  the  public  benefit  account,"  in  cash  and  in 
services,  upward  of  $1,550,000  a  year,  or  nearly  13 
per  cent  of  its  gross  earnings,  or  $1.67  per  head  of 
population  served.  This  comparison  shows  that  the 
city  of  Glasgow  could  collect  in  taxes  from  an  adequate 
system  of  street  railways  in  private  hands  a  much 
larger  sum  than  it  now  obtains  from  the  operation 
of  an  entirely  inadequate  system  of  municipal  street 
railways.  British  as  well  as  American  capitalists 
would  gladly  give  Glasgow  a  street  railway  system 
on  the  basis  of  one  mile,  or  more,  of  track  for  each 
2300  people,  should  the  city  offer  them  a  sufficiently 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900, 
q.  2924.  S.  Chisholm,  Lord  Provost  of  Glasgow:  "There  is  a  payment 
to  the  common  good  of  £12,500  (now  £25,000),  that  is  something  in  the 
shape  of  mileage;  the  tramway  (Corporation  of  Glasgow)  do  not  like 
to  call  it  so,  but  it  is  practically  just  a  mileage  on  the  use  of  the  street 
equivalent  to  what  the  old  company  used  to  pay  to  the  Common  Good." 


102       MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

liberal  franchise.  In  making  the  foregoing  com- 
parison, the  author  does  not  express  approval  of  the 
practice  of  taxing  the  Boston  Elevated  Railway 
Co.,  to  the  extent  of  13  per  cent  of  its  gross 
earnings.  On  the  contrary,  he  is  of  opinion  that 
that  taxation  is  excessive  and  curtails  the  facilities 
offered  by  the  company  to  the  public  of  Boston  and 
its  suburbs. 


CHAPTER  VI 

GLASGOW  PROVES  THAT  GRADED  FARES  MEAN  CON- 
GESTION OF  POPULATION 


Glasgow  Street  Railway  Fares 


Under   Company's 
Management 

Under  Municipality's  Management 

1894  to  June,  1902 

Since  June,  1902 

Fare 
in  Cents 

Distance,  in  Miles 

Distance,  in  Miles 

Distance,  in  Miles 

I 

None 

0.58 

O.58 

2 

1. 12 

i-75 

2.32 

3 

i.8o 

2-33 

348 

4 

2.20 

3-47 

4.64 

5 

None 

4.18 

5-8o 

6 

3-23 

5-34 

6.89 

7 

None 

? 

8.15 

8 

None 

? 

9.09 

9 

None 

? 

10.15 

The  foregoing  table  shows  that  under  the  com- 
pany's management  the  lowest  charge  was.  2  cents, 
for  1. 1  a  miles;  and  that  the  municipality,  on  taking 
over  the  tramways  in  1894,  divided  each  route  into 
half-mile  stages,  and  made  the  fare  for  the  half-mile 
stage  1  cent.  For  three  half-mile  stages  the  fare 
was  2  cents,  for  six  half-mile  stages  it  was  4  cents, 
and  for  nine   half-mile   stages  it  was  6  cents.     In 

June,   1902,  the  municipality  added  one  half-mile 

103 


104       MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

stage  to  the  2-cent  fare,  two  stages  to  the  4-cent  fare, 
and  three  stages  to  the  6 -cent  fare. 

In  August,  1903,  in  a  report  to  the  Tramways 
Committee  of  the  Corporation  of  Glasgow,  Mr.  John 
Young*  General  Manager  of  the  Glasgow  Tram- 
ways from  1894  to  September,  1904,  analyzed  the 
results  of  the  system  of  graded  fares.f  It  appeared 
that  93  per  cent  of  the  passengers  travelled  less  than 
2.5  miles,  and  that  only  1.55  per  cent  of  the  passen- 
gers —  2,744,000    persons    a    year  —  travelled    up- 

*  On  September  30,  1904,  Mr.  Young  resigned  his  position  with  the 
City  of  Glasgow  in  order  to  enter  the  service  of  Mr.  Yerkes,  Chairman 
of  the  Underground  Electric  Railways  Company,  of  London,  Limited, 
"  as  his  right-hand  man  in  the  control  of  the  tubes  and  tramways  of  his 
companies."  Mr.  Young  was  succeeded  by  Mr.  James  Dalrymple,  who 
had  served  in  the  Tramways  Department  since  1894.  He  had  entered  as 
an  accountant,  and  for  several  years  had  been  Mr.  Young's  chief  assist- 
ant and  deputy  general  manager. 

fYEAR  1902-3 


Fare, 

Passengers  Carried 

Traffic  Receipts 

in  Cents 

Number 

Per  Cent 

Per  Cent 

I 

2 

3 
4 

5 

6 

and  upward 

56,788,872 

108,021,739  J 

9,624,799 

2,098,181 

447.987 

197,971 

1 77. « 79.540 

32.05 
60.97 

5-43 
1. 19 
0.25 

O.I  I 

1 8.1 1 

68.91 
9.21 
2.68 
0.71 

0.38 

100.00 

100.00 

X  Careful  investigation  showed  that  "  almost  one-half  of  the  two- 
cent  passengers  travelled  little  more  than  one  mile,  or  about  the  distance 
of  two  one-cent  stages." 


GRADED  FARES  105 

ward  of  3.5  miles.  The  results  amply  confirmed  the 
saying  that  the  Glasgow  tramways  "churned  the 
people  up  within  the  city  limits"  but  did  not  enable 
them  to  escape  beyond  those  limits. 

Mr.  Young  also  showed  that  the  average  receipts 
per  passenger  carried  were  1.76  cents,  while  the 
average  cost  per  passenger  was  1.50  cents,  leaving 
a  margin  of  profit  of  0.26  cent  per  passenger  carried. 

In  the  following  December,  Mr.  Young  made  a 
supplementary  report  to  the  Sub-Committee  of  the 
Tramways  Committee  of  the  Corporation  of  Glas- 
gow. Therein  he  said:  "You  are  aware  that  I 
have  always  been  in  sympathy  with,  and  have  acted 
on,  the  view  that  the  surplus  revenue  of  the  Depart- 
ment should  be  apportioned  in  the  first  place,  to  the 
benefit  of  those  who  use  the  cars.  We  are  only, 
however,  in  our  second  year,  exclusively  of  electric 
traction,  and  before  taking  any  irretrievable  step  in 
the  direction  of  further  reducing  our  exceedingly 
low  fares,  those  responsible  for  the  efficiency  and 
success  of  the  tramway  undertaking  should  carefully 
consider  the  following  points  which,  in  the  future, 
are  sure  to  have  an  important  bearing  on  our  revenue 
and  expenditure :  (1)  an  increased  service  on  most  of 
the  existing  routes  is  called  for,  and  is  being  pro- 
vided as  quickly  as  possible;  (2)  additional  cross 
routes  in  the  city  are  being  constructed,  and  you  are 
being  called  upon  to  construct  others;  (3)  for  self- 
protection,  and  in  order  to  complete  the  Glasgow 


106    MUNICIPAL  OWNERSHIP  IN   GREAT  BRITAIN 

tramway  zone,  the  principle  of  which  has  been  es- 
tablished, we  are  even  now  promoting  an  'Order' 
(i.e.  asking  the  Board  of  Trade  for  an  Order)  prin- 
cipally for  outside  extensions;  (4)  we  shall  prob- 
ably experience  the  recurrence  of  a  period  of  depres- 
sion and  bad  trade,  during  which  our  revenue  is 
certain  to  be  adversely  affected.  We  have,  for- 
tunately, had  a  continuous  run  of  good  trade  since 
we  took  over  the  tramways  in  1894,  but  we  cannot 
expect  this  to  continue  always  without  a  break.  It 
is  thus  obvious  that  the  narrow  margin- of  profit  we 
have  to  work  upon,  viz.  0.26  cent  per  passenger, 
can  easily  be  made  to  disappear  without  further  re- 
ducing fares.  Besides,  no  one  can  foresee  what  the 
advance  of  science  will  bring  about  in  the  near 
future.  We  cannot  afford  to  look  upon  obsolescence 
of  plant  as  only  a  bogey  in  these  times  of  abnormal 
progress.  In  this  connection,  it  should  not  be  lost 
sight  of  that  our  capital  expenditure  is  at  present 
over  two  millions  sterling.  It  is  true  we  are  paying 
off  our  large  debt  by  means  of  the  Sinking  Fund; 
but  we  cannot  be  sure  that  long  before  the  Sinking 
Fund  period  of  thirty-one  years  has  expired  much  of 
the  present  plant,  and  even  our  system  of  traction, 
will  not  have  become  obsolete.  Until  our  system 
is  more  complete  and  consolidated,  I  recommend  the 
continuation  of  the  policy  which  the  Committee  have 
carried  out  since  the  formation  of  the  Department  in 
1894,  and  in  which  our   safety  lies,  viz.  that  any 


GRADED   FARES  107 

available  surplus  revenue  should  be  devoted  to  the 
reduction  of  our  borrowed  capital." 

This  report  compels  the  conclusion  that  Mr. 
Young  would  have  held  without  qualification  that 
the  margin  of  profit  of  0.26  cent  per  passenger  car- 
ried was  too  small  to  permit  the  rapid  extension  of  the 
Glasgow  street  railways  from  .the  existing  proportion 
of  one  mile  of  track  for  6700  people,  to  one  mile  of 
track  for  2300  people,  the  proportion  existing  in 
Boston.  On  the  other  hand,  it  is  obvious  that  some- 
thing like  that  proportion  must  be  obtained  before 
the  Glasgow  street  railways  can  aid  materially  in 
"  suburbanizing "  the  present  overcrowded  popu- 
lation. Further  proof  of  the  soundness  of  these  de- 
ductions from  Mr.  Young's  reports  is  found  in  the 
fact  that  Mr.  Young's  successor  and  Mayor  Dunne's 
"expert,"  Mr.  Dalrymple,  stated  in  Chicago,  in 
Cleveland,  and  elsewhere,  that  the  American  street 
railway  systems  could  not  afford  to  reduce  the  five- 
cent  fare  under  the  retention  of  the  system  of  prac- 
tically universal  transfers. 

It  was  therefore  a  disastrous  mistake  for  the  city 
of  Glasgow  to  inaugurate  the  system  of  municipal 
operation  of  the  tramways  by  extending  the  system 
Decentralization  of  graded  fares.  The  city  should 
prevented  by        have  adopted  the  American  practice 

Graded  Fares         of    &    uniform    fare>       That    uniform 

fare  should  have  been  one  adapted  to  the  pocket- 
books  of  the  merchants,  professional  men,   clerks, 


108    MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

and  better-paid  mechanics,  the  classes  that  will  take 
advantage  of  improved  transportation  facilities  and 
move  into  the  suburbs.  The  great  decentralization  of 
population  effected  in  the  American  cities  under  the 
regime  of  the  trolley  cars  was  effected  in  that  way. 
The  merchants,  professional  classes,  clerks,  and  better- 
paid  mechanics  moved  into  the  suburbs,  and  the 
houses  formerly  occupied  by  them  became  available 
for  the  less  well-paid  mechanics  and  the  day-laboring 
classes,  and  afforded  them  greatly  improved  housing. 
From  Park  Street  station,  Boston,  a  passenger 
may  ride  9.53  miles  to  Arlington  Heights;  9.83 
miles  to  Charles  River  Bridge;  8  miles  to  Waverly; 
7.9  miles  to  Melrose  line;  7.36  miles  to  Milton;  7.3 
miles  to  Neponset ;  6.32  miles  to  Woodlawn ;  and  6.04 
miles  to  Lake  Street.  The  uniform  fare  for  any  of 
these  journeys,  or  for  any  two  of  them  in  combina- 
tion, through  free  transfers,  is  5  cents.  The  citizen 
of  Glasgow  and  its  suburbs  has  no  such  facilities; 
and  if  he  had  them,  he  could  not  use  them.  Under 
the  system  of  graded  fares  in  force  the  charges  for 
these  journeys  would  be  6,  7,  and  8  cents,  and  there- 
fore prohibitive.  For  it  must  be  remembered  that 
a  given  sum  of  money  is  worth  fully  30  per  cent  more 
to  the  people  of  Glasgow  than  to  the  people  of  the 
United  States,  because  it  is  much  more  difficult  to 
earn.  To  illustrate:  the  municipal  tramways  pay 
the  motormen  and  conductors  $0.96  a  day  for  the 
first  six  months  of  service,  and  they  raise  that  sum 


GRADED   FARES  109 

until,  after  three  years'  service,  it  reaches  $1.20  per 
day  of  10  hours.  The  Boston  street  railways  pay 
their  motormen  and  conductors  $2.25  per  day  of 
9.5  hours  of  platform  work.  It  is  safe  to  say  that 
6  cents  in  Glasgow  are  equivalent  to  8  cents  in  the 
United  States;  and  the  experience  of  the  United 
States  shows  that  it  would  be  impossible  to  induce 
even  the  better-paid  half  of  the  community  to  move 
freely  in  the  suburbs  on  the  basis  of  a  charge  of  8 
cents,  or,  for  that  matter,  any  sum  above  5  cents. 

Three  cents  in  Glasgow  would  correspond  to  5 
cents  in  the  United  States,  considering  the  respective 
earning  powers  of  the  people  of  Glasgow  and  the 
people  of  the  United  States.  A  uniform  fare  of 
3  cents  in  Glasgow  would  afford  the  Tramway 
Department  a  margin  of  profit  that  would  justify 
the  rapid  extension  of  the  net  that  the  present  con- 
gestion of  the  population  demands. 

The  foregoing  discussion  has  shown  that  in  Glas- 
gow the  margin  of  profit  per  passenger  carried  is  only 
0.26  cent  under  the  system  of  graded  fares,  and  that 
that  margin  does  not  justify  any  rapid  extension  of 
the  net  ahead  of  population  for  the  purpose  of  induc- 
ing the  better-paid  half  of  the  community  to  move 
into  the  suburbs,  or,  rather,  to  create  the  suburbs. 
It  now  remains  to  add  that  the  Glasgow  Tramway 
Department  is  not  even  sure  of  its  ability  to  retain 
that  slender  margin  of  profit.  The  temptation  is 
irresistible  to  well-meaning  but  ill-informed  persons 


110       MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

and  to  the  demagogues  to  demand  that  the  i-cent 
stage  be  enlarged,  on  the  ground  that,  if  the  city 
can  carry  people  2.32  miles  for  2  cents,  it  certainly 
can  carry  them  more  than  0.58  mile  for  1  cent. 
Both  of  the  aforementioned  reports  of  Mr.  Young 
were  called  out  by  precisely  that  argument.  Some 
persons  had  demanded  that  the  penny  stage  be 
doubled,  others  that  it  be  lengthened  to  three-quar- 
ters of  a  mile,  or  a  mile.  These  demands  led  Mr. 
Young  to  say:  "It  is  very  easy  for  persons,  whose 
good  faith  is  unquestionable,  but  who  have  no  re- 
sponsibility in  the  matter,  to  get  up  an  agitation, 
calling  for  concessions  in  the  tramway  service.  It 
must  be  borne  in  mind,  however,  and  I  say  it  with 
all  respect  —  that  these  people  have  not  the  means 
of  knowing  all  the  bearings  of  the  case.  It  certainly 
cannot  be  expected  that  they  have  sufficient  knowl- 
edge to  advise  on  a  question  seriously  affecting  the 
financial  position  and  outlook  of  a  large  depart- 
ment, or  even  to  give  a  deliverance  as  to  what  is 
most  serviceable  to  the  community  as  a  whole.  I  am 
afraid  if  the  large  commercial  departments  of  the 
Corporation,  like  the  Water,  the  Gas,  the  Electricity, 
or  the  Tramways,  are  to  be  influenced  by  movements 
of  this  kind,  the  results  may  be  disastrous." 

The  proposal  to  lengthen  the  i-cent  stage  of 
course  always  is  made  on  behalf  of  the  wage-earning 
classes.  But  Mr.  Young  points  out  that  it  is  a 
fallacy  to  suppose  that  the  wage-earning  class  form 


GRADED  FARES  111 

the  bulk  of  the  i-cent  passengers.  On  the  con- 
Wage  Earners  get  trary,  only  i  in  5  of  the  "  workmen" 
Little  Benefit  using  the  early  morning  cars  is  a 
1 -cent  passenger.  The  percentage  at  different  fares 
is  as  follows:  i  cent,  20.4  per  cent;  2  cents,  72.3  per 
cent;  3  cents,  6.2  per  cent;  4  cents,  0.94  per  cent;  5 
cents,  0.6  per  cent.  The  i-cent  passengers  are  prin- 
cipally those  whose  duties  necessitate  their  frequent 
moving  about  the  city.  This  is  the  class  who  would 
to  the  largest  extent  get,  and  take,  the  advantage  of 
the  i-cent  fare.  In  other  words,  the  i-cent  fare  is  a 
cheap  luxury  to  the  merchants,  the  professional  men, 
and  the  wives  and  daughters  of  those  classes  when 
engaged  in  shopping  expeditions.  It  is  cheap  luxury 
that  is  of  no  particular  importance  to  them,  but  is 
of  serious  consequence  to  the  clerk  and  mechanic 
who  would  like  to  move  his  family  into  the  suburbs, 
but  finds  the  opportunity  greatly  restricted  by  reason 
of  the  i-cent  fare.  Street  railways  built  out  into 
and  beyond  the  outskirts  of  the  city,  for  the  purpose 
of  building  up  suburbs,  take  time  to  develop.  They 
are  commonly  called  "feeders,"  but  for  the  first 
years  they  are  "suckers,"  that  is,  losing  ventures. 
No  street  railway  manager  can  afford  to  build  them 
on  any  considerable  scale  unless  he  has  a  considerable 
margin  of  profit  on  the  carriage  of  the  passenger 
who  wishes  to  indulge  the  luxury  of  saving  the  walk- 
ing of  a  few  blocks. 

Glasgow  is  not  the  only  city  in  which  the  expert 


112      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

tramway  manager  has  to  fight  hard  against  unwise 
proposals  to  lower  passenger  fares.  For  some 
years  past  Mr.  C.  R.  Bellamy,  the  General  Manager 
of  the  Municipal  Tramways  of  Liverpool,  has  been 
hard  pressed  by  persons  demanding  the  introduc- 
tion of  the  i -cent  fares.  At  the  annual  meeting 
of  the  Municipal  Tramways  Association,  held  in 
July,  1905,  Mr.  Bellamy  expressed  himself  as  fol- 
lows: "He  submitted  the  proposition  that  the  unit 
fare  and  stage  should  be  fixed  so  as  to  secure  that 
the  passengers  travelling  to  the  outskirts  of  a  large 
town,  a  distance  of  4  or  5  miles,  could  be  carried 
for  a  fare  not  exceeding  4  cents,  and  that  this 
could  not  be  done  with  a  cent-a-mile  unit.  .  .  . 
Municipalities  had  problems  to  consider  in  con- 
junction with  their  tramways  apart  from  what 
might  be  termed  'the  equitable  adjustment  of  stages.' 
As  an  example,  take  the  illustration  —  perhaps  the 
most  important  from  the  general  point  of  view  of 
a  municipality  —  the  overcrowding  in  the  central 
area  of  large  towns,  which  had  resulted  largely  in 
consequence  of  a  dearth  of  travelling  facilities. 
The  question  of  how  far  a  workman  resided  from 
his  work  was  of  no  moment.  The  important  con- 
siderations were:  How  many  minutes  need  be  oc- 
cupied in  covering  the  distance  and  the  cost  in  doing 
it?  If  they  accepted  the  principle  that  a  wider  dis- 
tribution of  the  inhabitants  in  large  towns  was  de- 
sirable, it  was  important  that  long-distance  passen- 


GRADED   FARES 


113 


gers  should  be  especially  considered,  and  that  they 
should  be  carried  to  the  outskirts  where  land  was 
plentiful  as  cheaply  as  possible."  * 

In  the  year  1902  not  less  than  89  per  cent  of  the 
passengers  carried  by  the  Liverpool  tramways 
travelled  not  to  exceed  2.3  miles,  and  only  3844 
passengers  travelled  6  miles,  f  In  December,  1904, 
Liverpool  and  its  suburbs  had  a  population  of 
763,000,  and  only  103  miles  of  street  railway  track, 
or  one  mile  for  each  7400  inhabitants.  In  1901, 
there  were  living  in  Liverpool  proper,  in  the  over- 
crowded condition  of  more  than  two  persons  in  one 
room,  54,390  persons,  or  7.94  per  cent  of  the  popu- 
lation. J 

Before  leaving  this  subject,  mention  should  be 
made  of  a  resolution  recently  passed  by  the  Cor- 
poration of  Glasgow,  and  the  comments  thereon 
made  by  The  Municipal  Journal,^  the  organ  of  the 


*  The  Municipal  Journal  (London),  July  u,  1902. 
of  February  27,  1903,  and  February  3,  1905. 


See  also  issues 


t  Liverpool  Municipal  Tramways,  Year  Ending  Dec.  31,  1902 


Fare,  in  Cents 

Distance,  in  Miles 

Passengers  carried 

Percentage 

2 

4 

6 

8 

10 

2.3 

? 
? 
? 
6 

97,697,000 

11,119,000 

497,000 

36,000 

4,000 

89-33 
IO.16 

0.45 
O.03 
0.0 1 

109,353,000 

IOO.OO 

%  Census  of  England  and  Wales,  1901. 
dices. 

§  September  2,  1904. 


General  Report,  with  Appen- 


114      MUNICIPAL   OWNERSHIP  IN  GREAT   BRITAIN 

adherents  of  municipal  ownership.  The  episode 
illustrates  how  one  step  in  the  direction  of  public 
ownership  tends  inevitably  to  lead  to  others.  Says 
The  Municipal  Journal:  "Glasgow  Corporation, 
on  the  motion  of  Mr.  Ferguson,  has  passed  a  reso- 
lution instructing  the  Committee  on  Land  Values 
to  inquire  into  the  desirability  of  the  Corporation 
obtaining  possession  of  all  the  land  outside  its  boun- 
daries along  which  the  tramways  are  carried.  This 
is  an  exceedingly  important  phase  of  the  Land  Values 
question,  and  one  that  we  hope  will  receive  the  atten- 
tion of  all  public  bodies  who  own  or  are  thinking 
of  owning  tramways.  Hundreds  of  acres  of  pasture 
land  are  being  converted  into  'ripe  building  land' 
by  the  action  of  local  authorities  in  constructing 
tramways,  and  almost  the  whole  of  the  'unearned 
increment'  which  accrues  goes  into  the  pockets 
of  people  who  have  merely  been  smart  enough  to 
buy  the  property  and  erect  houses  upon  it.  The 
question  is  a  very  difficult  one,  but  the  difficulties 
have  been  surmounted  in  Germany,*  where  noo 
cities  and  towns  are  at  this  moment  having  all  their 
rates  paid  because  they  have  become  owners  of  the 
land  outside  their  boundaries  along  which  tramways 

*  In  the  days  of  Adam  Smith,  speakers  and  writers  on  questions  of 
public  policy,  when  confronted  with  perplexing  problems,  used  to  sur- 
mount the  difficulty  by  saying,  "  It  has  been  done  in  China."  The 
public  speakers  and  writers  of  to-day  make  a  similar  use  of  Germany, 
Australia,  and  New  Zealand,  countries  concerning  which  the  general 
public  has  acquired  more  misinformation  than  an  energetic  and  well- 
informed  man  could  correct  in  a  lifetime. 


GRADED   FARES  115 

have  been  carried  *  There  are  plenty  of  ways  of 
relieving  the  ratepayers'  burdens  in  this  country 
if  the  public  would  only  face  the  position  and  apply 
bold  remedies.  This  is  one  of  them.  The  arguments 
apply,  of  course,  whether  it  be  a  company  or  a  local 
authority  owning  the  tramway.  In  the  former  case, 
the  tramway  rights  belong  to  the  community,  al- 
though they  are  exercised  by  a  private  combination, 
and  it  is  equally  the  public  which  create  the  incre- 
ment that  at  present  goes  into  the  pockets  of  those 
who  have  done  nothing  whatever  to  earn  it." 

It  is  a  matter  of  common  knowledge  that  in  the 
United  States  the  extension  of  the  trolley  lines  has 
increased  enormously  the  value  of  the  distant  out- 
lying lands,  and  that  it  has  at  the  same  time  fre- 
quently arrested  the  increase  in  value,  or  actually 
impaired  the  value,  of  the  lands  lying  in  the  out- 
skirts of  the  cities  as  they  existed  under  the  horse- 
car  regime.  In  the  Glasgow  City  Council  it  has 
been  argued  repeatedly  that  the  city  of  Glasgow 
ought  not  to  extend  the  street  railways  into  suburbs 
that  are  not  a  part  of  Glasgow;  as  such  action 
would  cause  people  and  industries  to  move  out  of 
Glasgow  proper  and  thus  decrease  the  taxable  value 
of  Glasgow  proper.f 

*  In  October,  1904,  there  were  in  Germany  only  138  cities,  towns, 
and  districts  which  had  electric  street  railways.  The  total  route-mileage 
was  2369  miles;  and  the  total  track-mileage  was  3544  miles. 

f  Eisenbahntechnische  Zeitschrijt,  June  7,  1905.  This  same  question 
has  come  up  in  Germany ;  and  has  led  a  recent  contributor  to  the  fore- 
going journal  to  construct  the  subjoined  table,  which  shows  clearly  the 


116      MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 


Ilford  is  a  city  of  41,000  people  and  lies  in  the 
outlying  regions  of  Greater  London.  At  the  close 
of  1904  it  had  nine  miles  of  street  railway  track; 
and  some  of  its  pleasantest  parts  were  not  built 
upon  because  they  were  without  means  of  convey- 
ance to  the  railway  station  and  to  the  centre  of  the 
city.  "In  February,  1904,  the  ratepayers  of  Ilford, 
by  a  large  majority  at  the  poll,  rejected  the  city's 
proposals  for  an  extension  of  the  existing  tramways, 
after  having,  at  the  statutory  meeting,  ridiculed  the 
assurances  of  the  Chairman  of  the  Tramways  Com- 
mittee that  the  tramways  were  doing  excellent 
business,  and  would  show  good  results  at  the  end  of 
the  first  half-year.  .  .  .  The  objection  (urged  against 
extending  the  tramways)  which  has  met  with  the 
greatest  amount  of  support,  is  that  tramways  ought  not 
to  be  laid  to  benefit  the  developers  of  new  estates."  * 

effect  of  the  "  exodus  to  the  suburbs "  on  the  tax-raising  power  of  the 
city  proper. 


Comparison  ok  Growth  in 

Population    and   Taxable 

Values  op  Berlin  and  its 

Suburbs 

Population 

Taxes  Paid,  Per 
Head  of  Popula- 
tion, in  Marks 

1893 

1903 

1893 

1903 

Berlin   .... 
Charlottenburg  . 
Schonberg     .     . 
Friedenau .     .     . 
Steglitz  .... 
Wilmersdorf  .     . 
Grfinewald      .     . 

1,641,000 
107,000 

43.5°° 
6,Soo 

15.300 

10,000 

1,200 

1,894,000 

206,000 

117,000 

14,100 

25,000 

46,700 

3.900 

1240 
17.60 

IO-33 
12.76 
II.62 
1348 
50-1 3 

1342 
25-94 
16.31 
19.06 
15.11 

25-13 
135.21 

*  The  Municipal  Journal,  April  22,  1904. 


CHAPTER  VII 

EDINBURGH 

In  1870,  the  Lord  Provost  of  Edinburgh  called  a 
meeting  of  the  citizens  to  consider  the  question  of 
improving  the  housing  of  the  poorer  classes.  At 
that  meeting  the  Lord  Provost  appointed  Dr. 
Alexander  Wood  chairman  of  a  committee  to  in- 
quire into  the  state  of  the  poorer  classes.  The 
committee  found  that,  while  the  town  as  a  whole 
was  not  overcrowded,  certain  districts  were  enor- 
mously congested.  Dr.  Wood  and  Mr.  Charles 
Cowan,  then  member  of  Parliament  for  Edinburgh, 
thought  that  it  would  be  better  to  give  the  inhab- 
itants of  the  congested  districts  a  chance  to  spread 
out  than  it  would  be  to  tear  down  the  unsanitary 
houses  in  which  they  were  living  and  build  sanitary 
ones.  Accordingly,  they  inspected  the  tramways 
in  London,  Liverpool,  and  Birkenhead.  They  were 
so  favorably  impressed  that  they  returned  to  Edin- 
burgh and  organized  the  Edinburgh  Street  Tram- 
ways Co.  for  the  express  purpose  of  spreading  out 
the  population.* 

*  Report  of  Committee  on  Tramways  (Use  of  Mechanical  Power) 
Bills,  1878,  q.  1009,  testimony  of  Dr.  A.  Wood. 

"7 


118      MUNICIPAL   OWNERSHIP   IN  GREAT   BRITAIN 

The  company  from  the  start  considered  the  needs 
of  the  so-called  working  classes.  It  charged  a 
uniform  fare  of  4  cents,  but  carried  working  men  and 
The  Tratmvaysy  women  at  the  rate  of  1  cent  a  mile 
under  Private       until  g  or  Q  o'clock  in  the  morning, 

Management,  . 

favor  Working  fr°m  12  to  i  in  the  afternoon,  and 
Classes  from  5  to  6   in   the   evening.      On 

certain  routes  used  largely  by  the  working  classes 
the  company  made  a  uniform  charge  of  2  cents  a 
ride.  It  so  successfully  studied  the  needs  of 
the  people  that  Edinburgh  became  one  of  the 
few  cities  of  Great  Britain  —  if  not  the  only  one 
—  from  the  streets  of  which  the  omnibus  had  com- 
pletely disappeared  in  1878.*  But  subsequently, 
after  the  city  had  paralyzed  the  Edinburgh  Street 
Tramways  Co.,  the  omnibus  returned. 

The  company  heeded  the  prejudices  of  the  rich, 
who  deemed  the  street  railway  a  nuisance  because 
it  jarred  them  to  cross  it  in  their  carriages,  as  care- 
fully as  it  studied  the  needs  of  the  classes.  In  the 
retail  shop  district  it  laid  down  turn-outs  in  order 
that  the  passing  street  cars  might  turn  out  for  the 
carriages  standing  in  front  of  the  shops.f 

Though  the  Edinburgh  Street  Tramways  Co. 
was  started,  in  part,  from  philanthropic  motives, 


*  Report  from  the  Committee  on  Tramways  (Use  of  Mechanical  Power) 
Bills,  1878,  q.  1072,  1073,  and  1054  to  1057. 

t  Report  of  Lords  Committee  on  the  Regulations  which  it  may  be  de- 
sirable to  impose  in  relation  to  the  Construction  and  Use  of  Tramways, 
1878-79;    q.  1 142. 


EDINBURGH  119 

and  though  it  continued  to  be  managed  with  great 
Development  re-  public  spirit  and  intelligence,  the 
tarded  by  opposi-  Corporation  of  Edinburgh,  from  the 
twn  of   tty  beginning  to  the  end,  treated  the  com- 

pany as  an  institution  to  be  thwarted  and  bled. 

In  1877,  Mr.  D.  W.  Paterson,  Secretary  of  the 
Edinburgh  Street  Tramways  •  Co.,  testified  before 
a  Committee  of  Parliament  that  the  company  had 
been  obliged  to  conciliate  the  corporation  by  making 
many  payments  not  called  for  by  the  Tramways 
Act,  1870.  On  one  occasion  $15,000  for  additional 
paving;  on  other  occasions  the  company  had  been 
obliged  to  pave  the  whole  street ;  on  another  occasion 
the  Corporation  had  asked  the  company  to  pay 
$25,000  toward  the  widening  of  a  bridge,  but,  not 
being  able  to  exact  that  sum,  had  accepted  $12,500. 
The  Secretary  added  that,  in  spite  of  making  all  these 
payments,  the  company  frequently  had  been  unable 
to  get  the  Corporation's  consent  to  making  extensions 
which  had  been  demanded  by  owners  of  land  in  the 
suburbs,  and  would  have  made  available  for  build- 
ing purposes  hundreds  upon  hundreds  of  acres  of 
land.  He  concluded  with  the  words:  "Tramway 
construction  will  be  stopped  practically  unless  an 
appeal  is  given  from  the  refusal  of  consent  of  the 
local  authorities  to  somebody  not  actuated  by  local 
and  personal  prejudices  as  the  local  and  road  author- 
ities are  apt  to  be."  * 

*  Report  of  Committee  on  Regulations  as  to  the  Use  of  Steam  or  other 
Mechanical  Power  upon  Tramways  andPublic  Roads,  1877 ;  q.  926  to  101 7. 


120      MUNICIPAL   OWNERSHIP  IN  GREAT    BRITAIN 

In  1878,  Dr.  Wood,  chairman  of  the  tramway 
company,  testified  as  follows  before  a  Parliamentary 
Committee:  "We  have  been  unfortunate  in  Edin- 
burgh, though  not  singular  (exceptional),  in  having 
had  a  great  deal  of  opposition  from  the  local  author- 
ities. .  .  .  We  never  have  gone  in  for  an  improve- 
ment of  our  tramways  without  having  had  to  pay 
money  or  make  some  concession.  I  can  give  many 
instances,  but  will  restrict  myself  to  one,  which  will 
show  how  the  local  authorities  deal  with  us.  We 
have  two  such  authorities  in  Edinburgh,  the  Town 
Council  and  the  Road  Trust.  Our  charter  author- 
ized us  to  build  from  Edinburgh  to  Trinity,  to  the 
west  of  Leith.  After  getting  the  charter,  we  had 
General  Hutchinson,  of  the  Board  of  Trade,  come 
down  to  tell  us  unofficially  whether  we  could  lay 
the  track  (to  Trinity)  with  a  grade  of  1  in  10.  Gen- 
eral Hutchinson  said:  'You  may  lay  the  rail,  but 
the  Board  of  Trade  will  never  sanction  your  working 
a  grade  of  1  in  10.'  The  Town  Council  then  re- 
quested us  to  abandon  that  part  of  our  line,  and  we 
agreed  at  once.  Accordingly,  in  1874,  we  put 
into  Parliament  an  Abandonment  Bill.  The  Town 
Council  supported  it  before  Parliament,  but  at  the 
eleventh  hour  the  Road  Trust  sent  up  a  deputation 
to  Parliament,  and  said  to  the  promoters  of  the 
Bill  :  'Unless  you  pay  us  $15,000  (toward  the  cost 
of  certain  street  widenings)  and  agree  to  remove 
your  lines  from  a  certain  street  (alleged  to  be  too 


EDINBURGH  121 

narrow  for  street  railways),  we  will  oppose  your 
Bill.'  We  had  had  a  great  deal  of  litigation  over 
the  question  of  our  right  to  lay  the  line  which  the 
Road  Trustees  wished  us  to  remove,  and  the  House 
of  Lords  (the  highest  Court  of  Appeal)  had  just 
decided  the  matter  in  our  favor;  and  yet,  we  were 
obliged  to  pay  that  $15,000  for  nothing  more  than 
to  get  rid  of  the  opposition ;  and  to  remove  a  portion 
of  our  line  which  the  House  of  Lords  had  decided 
we  had  a  legal  right  to  lay.  ...  I  can  give,  if  it 
is  necessary,  but  I  do  not  like  to  say  unpleasant 
things,  a  great  many  more  instances  of  the  way  in 
which  we  have  been  treated  by  the  local  authorities." 
The  witness  concluded  with  the  statement  that  the 
company  paid  annually  upon  13  miles  of  tramway 
nearly  $2500  per  mile  in  taxes  and  for  maintenance 
of  the  streets,  often  being  obliged  to  pave  and  main- 
tain a  larger  part  of  the  street  than  the  Tramways 
Act,  1870,  demanded  that  the  street  railway  com- 
panies should  pave  and  maintain.* 

In  1879,  Mr.  Paterson,  Secretary  of  the  Edin- 
burgh Street  Tramways  Co.,  repeated  before  a 
Committee  of  Parliament  the  testimony  which  he  had 
given  in  1877.  He  added  that  the  Town  Council 
had  refused  to  consent  to  the  company  doubling  its 
track  between  Leith  and  Portobello.  The  Council 
would  give  no  reason  for  its  refusal,  but  one  of  the 

*  Report  oj  Committee  on  Tramways  {Use  of  Mechanical  Power) 
Bills,  1878;  q.  1024  to  1044. 


122      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

Road  Trustees  had  said  in  private  that  the  Council 
feared  that  if  Parliament  should  grant  power  to  lay 
a  second  track,  it  would  subsequently  grant  leave 
to  use  steam  power  between  Edinburgh  and  Porto- 
bello.  The  line  in  question  was  carrying  a  million 
passengers  a  year.  The  Secretary  stated  that  with 
the  facilities  that  could  be  afforded  with  a  double 
track,  the  traffic  would  double,  for  Portobello  was 
a  very  desirable  suburb,  lacking  nothing  but  ade- 
quate transportation  facilities.  In  reply  to  the  query 
whether  the  company  intended  to  extend  its  lines 
and  to  enter  fresh  districts,  the  Secretary  replied: 
"We  have  made  various  attempts  at  the  earnest 
solicitations  of  various  parties  in  the  suburbs  to 
extend  our  system,  but  we  have  failed.  We  have 
been  unsuccessful  in  two  attempts  to  get  the  necessary 
consent  from  the  local  and  road  authorities,  not- 
withstanding that  the  people  in  the  districts  desired 
the  extensions."* 

In  1877,  the  city  of  Edinburgh  defeated  before 
the  House  of  Lords  a  bill  that  had  passed  the  House 
of  Commons  and  authorized  the  use  of  steam  on 
the  tramway  between  Edinburgh  and  Portobello, 
"because  it  suspected  that  the  time  would  soon 
come  when  an  attempt  would  be  made  to  introduce 
them  throughout  our  streets  as  well."  f 

*  Report  of  Lords  Committee  on  the  Regulations  which  it  may  be  de- 
sirable to  impose  in  relation  to  the  Construction  and  Use  of  Tramways, 
1878-79;   q.  1095,  1 105,  1108,  1 130,  1 127,  and  1167. 

t  Report  of  Committee  on  Regulations  as  to  the  Use  of  Steam  or  other 
Mechanical  Power  upon  Tramways  and  Public  Roads,  1877;  q.  2175, 
Sir  James  Falshaw,  Lord  Provost  of  Edinburgh  from  1874  to  1877. 


EDINBURGH  123 

In  1877  to  1879  Edinburgh  and  other  cities  evinced 
such  opposition  to  the  use  of  steam  on  tramways 
that  the  British  Parliament  committees  of  1877, 
1878,  and  1879  reported  in  favor  of  such  a  law. 

Early  in  1877  the  Edinburgh  Street  Tramways 
Co.  conducted  some  experiments  with  the  use  of 
steam.  General  Hutchinson,  Inspector  of  the  Board 
of  Trade,  witnessed  the  experiments  and  found  that 
the  steam  tramways  were  "very  manageable"  and 
could  be  operated  with  safety  to  the  passengers  as 
well  as  the  occupants  of  vehicles  drawn  by  horses.* 
The  members  of  the  Edinburgh  Town  Council 
refused  to  witness  those  experiments  or  to  send  the 
city  engineer  to  witness  them.f  Later  in  the  year 
the  city  of  Edinburgh  sent  its  Lord  Provost,  Sir 
James  Falshaw,  to  London  to  argue  before  a  Par- 
liamentary Committee  that  the  Edinburgh  experi- 
ments with  steam  had  not  been  successful.  Sir 
James  Falshaw's  argument  was  that  the  steep  gradi- 
ents in  Edinburgh  made  the  use  of  steam  unsafe, 
alleging  that  the  engineers  had  not  yet  devised  a 
safe  brake.  He  maintained  —  in  opposition  to  the 
expert  witnesses  —  that  the  horse  cars  were  held 
back  in  part  by  the  horses,  and  not  by  the  brakes 

*  Report  of  Lords  Committee  on  the  Regulations  which  it  may  be  desir- 
able to  impose  in  relation  to  the  Construction  and  Use  of  Tramways, 
1878-79 ;  q.  1 74 ;  and  Report  of  Committee  on  Tramways  (Use  of  Mechan- 
ical Power)  Bills,  1878;  q.  523  to  596. 

t  Report  of  Committee  on  Regulations  as  to  the  Use  of  Steam  or  other 
Mechanical  Power  upon  Tramways  and  Public  Roads,  1877;  q.  2144  to 
2146,  and  2182,  Sir  James  Falshaw,  Lord  Provost. 


124      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

exclusively.  He  argued  that  the  streets  of  Edinburgh 
must  not  be  used  by  the  tramway  company  for  the 
purpose  of  gaining  the  experience  which  he  alleged 
was  required  for  the  devising  of  a  perfect  brake. 
He  argued  that  the  tramway  company  ought  to  go 
out  into  the  country,  purchase  some  fields  with  hills 
in  them,  lay  down  tracks  on  those  hills,  and  gain  the 
experience  required  for  the  perfecting  of  the  brake. 
But  he  added  that  the  Corporation  of  Glasgow  would 
not  necessarily  accept  the  results  of  such  experience 
gained  in  the  fields,  on  the  ground  that  those  were 
"  conditions  of  the  weather  and  of  the  rails  and  of  the 
streets  which  might  not  occur  in  the  fields,  and  which 
might  be  extremely  dangerous."  *  It  is  scarcely 
necessary  to  add  that  these  arguments  were  advanced 
by  Sir  James  Falshaw,  the  politician.  Sir  James 
Falshaw,  the  lawyer  and  director  in  the  North  Brit- 
ish Railway,  was  a  person  of  good  sense. 

Sir  James  Falshaw  and  his  followers  and  successors 
ultimately  convinced  the  tramway  company  that  it 
was  useless  to  seek  to  realize  the  ideal  with  which 
Company,  dis-  it  nad  set  out  in  1 87 1 :  to  build  a 
couraged,  sells  street  railway  system  which  should 
Plant  to  City  decentralize  the  overcrowded  popu- 
lation of  Edinburgh.  The  company  gave  up  the 
struggle,  sat  down  and  awaited  the  expiration   of 

*  Report  of  Committee  on  Regulations  as  to  the  Use  of  Steam  or  other 
Mechanical  Power  upon  Tramways  and  Public  Roads,  1877;  q.  21 13  to 
2 15 1,  Sir  James  Falshaw. 


EDINBURGH  125 

its  charters  and  the  compulsory  sale  of  its  plant  to 
the  city  on  the  basis  of  cost  of  replacement,  less 
allowance  for  depreciation. 

In  the  period  from  1894  to  1902  the  city  of  Edin- 
burgh bought  those  portions  of  the  Edinburgh  Street 
Tramways  Co.'s  lines  which  lay  within  the  city 
limits  and  upon  which  the  charters  expired  in  the 
period  in  question  —  24.5  miles  of  track  in  all. 
The  lines  lying  outside  of  the  city  limits  were  left 
on  the  hands  of  the  company.  They  were,  of  course, 
worthless,  hanging  in  the  air  as  they  did.  In  1901 
to  1903  the  company  operated  eight  or  nine  miles 
of  track  upon  which  the  operating  expenses  exceeded 
the  receipts  by  $4720.  Early  in  1904,  The  Mu- 
nicipal Journal*  announced,  under  the  heading,  "A 
Good  Municipal  Bargain,"  that  the  city  of  Leith 
had  purchased  the  remaining  lines  of  the  Edinburgh 
Street  Tramways  Co.  for  $300,000,  "which  is  stated 
to  be  less  than  the  company  paid  for  the  tramways." 

The  city  of  Edinburgh  bought  24.5  miles  of 
track,  built  an  additional  22.5  miles,  and  finally, 
in  1897  and  the  subsequent  years,  it  converted  its 
45  miles  of  track  from  a  horse  car  system  to  a  cable 
system.  In  December,  1904,  the  405,000  people 
living  in  Edinburgh,  Leith,  and  Portobello,  had  at 
their  service  47  miles  of  track  of  cable  line  and 
8  miles  of  track  of  horse  line,  or  1  mile  of  street 
railway  track  for  each  7400  people. 

*  February  5,  1904. 


126      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

The  census  of  1901  showed  that  Edinburgh 
proper  had  a  population  of  317,000.  There  were 
living  in  the  overcrowded  condition  of  3  to  10 
persons  in  one  room  not  less  than  17,399  persons; 
and  in  the  overcrowded  condition  of  5  to  12  per- 
sons, or  more,  in  two  rooms,  not  less  than  57,193 
persons.* 

Immediately  after  Edinburgh  had  purchased  the 
tramways  of  the  Edinburgh  Street  Tramways  Co., 
it  leased  them  to  the  Edinburgh  &  District  Tramways 
Co.,  Ltd.  A  few  years  afterward  it  sent  its  Lord 
Provost  to  the  United  States  to  report  on  the  Ameri- 
can street  railways.  After  the  corporation  had  re- 
ceived the  Lord  Provost's  report,  it  decided,  in  1896, 
to  adopt  the  cable  system,  which  was  then  being 


♦5,283  persons  living  3  to  1  room. 
4,756  persons  living  4  to  I  room. 
3,536  persons  living  5  to  1  room. 
2,106  persons  living  6  to  I  room. 
1,029  persons  living  7  to  1  room. 
827  persons  living  8  to  10  in  1  room. 

16,145  persons  living  5  to  2  rooms. 
14,736  persons  living  6  to  2  rooms. 
11,662  persons  living  7  to  2  rooms. 
7,336  persons  living  8  to  2  rooms. 
4,419  persons  living  9  to  2  rooms. 
2,895  persons  living  10  to  12  to  2  rooms. 


1871 

1 891 
1 901 


Overcrowded  one- 
room  dwellers 


3Mi6 
20,864 

17.399 


Overcrowded  two- 
room  dwellers 


35»8l3 
49,224 

57.193 


Total  population 


196,500 
261,300 
316,500 


EDINBURGH  127 

abandoned  in  the  United  States  *  The  Corporation 
condemned  the  overhead  trolley  system  as  unsightly, 
and  it  deemed  the  underground  electric  conduit  a 
mere  experiment. 

The  city  made  a  contract  with  the  Edinburgh  and 
District  Co.  whereby  the  former  was  to  equip  the 
street  railways  for  cable  traction,  and  the  latter  was 
Unbusinesslike  to  Pav  an  annual  rental  of  7  per  cent 
Management  by     upon  the  combined  cost  of  the  exist- 

Municipaltiy  ^g  horse  car  sygtem  _  $I)005)000  _ 

and  the  completed  cable  system.  The  amount  that 
the  city  was  to  spend  upon  the  conversion  from 
horse  traction  to  cable  traction  was  left  undeter- 
minate,  but  it  was  estimated  at  about  $3,900,000. 
The  company  believed  that  it  could  rely  upon  the 
city  being  willing  and  able  to  do  the  work  in  a  busi- 
nesslike manner  and  at  a  reasonable  cost.  The 
faith  of  the  company  proved  to  be  entirely  misplaced. 
The  city's  incompetence  and  extravagance  raised  the 
cost  of  the  installation  of  the  cable  system  to  up- 
wards of  $5,850,000,  which  was  fully  50  per  cent 
in  excess  of  what  the  work  would  have  cost  a  private 
company. 

*  Street  and  Electric  Railways,  United  Stales  Census  Bulletin:  3,  1903. 
Cable  Street  Railways  in  Operation  in  the  United  States 


1890 

Number  of  companies 55  26 

Miles  of  single  track 488  241 


128       MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

At  the  close  of  the  year  1904,  the  Edinburgh  and 
District  Tramways  Co.,  Ltd.,  had  not  succeeded  in 
developing  sufficient  traffic  to  earn  the  rental  which 
it  was  paying  upon  the  inflated  expenditure  upon  the 
city's  street  railway  system.  At  the  close  of  1903 
the  company  had  spent  $709,615  in  equipping  the 
street  railways  with  a  rolling-stock,  etc.  It  had 
raised  that  sum  by  issuing  $462,500  of  stock,  fully 
paid;  $248,500  of  4  per  cent  mortgages;  and 
$250,000  of  6  per  cent  mortgages.  At  the  close  of 
1904,  the  stockholders  had  had  no  returns  from  their 
investment.  The  comparatively  poor  opinion  which 
investors  have  of  the  bargain  made  by  the  company 
is  shown  by  the  fact  that  when  the  company  had  to 
raise  money  in  1902,  it  was  obliged  to  pay  6  per 
cent,  an  indication  of  second-rate  credit.  There  is 
great  rejoicing  in  Edinburgh,  for  the  city  is  mak- 
ing money  in  addition  to  having  "soaked"  the 
operating  company,  to  repeat  the  word  recently 
employed  by  an  officer  of  the  Corporation  of 
Edinburgh. 

The  reasons  why  it  cost  the  city  of  Edinburgh  fully 
50  per  cent  more  than  it  would  have  cost  a  private 
company  to  equip  the  street  railways  for  cable  trac- 
tion are  indicated  in  a  recent  interview  of  Sir  Robert 
Cranston,  Lord  Provost  of  Edinburgh,  by  Mr. 
Raymond,  special  correspondent  of  the  Chicago 
Tribune*    In  reply  to  the  query  why  the  city  should 

*  May  15,  1905. 


EDINBURGH  129 

not  operate  the  tramways,  the  Lord  Provost  said: 
"So  long  as  the  road  is  under  municipal  manage- 
ment there  is  always  a  temptation  to  provide  employ- 
ment in  some  way  for  political  hangers-on,  and  they 
are  not  generally  the  class  of  people  who  are  profit- 
able to  hire.  .  .  .  We  consider  ourselves  free  from 
political  influence  here  in  Scotland,  but  I  must  con- 
fess that  now  and  then  influences  are  brought  to 
bear  to  secure  employment  in  municipal  plants 
which  are  not  entirely  worthy.  For  instance,  if  I 
were  running  for  reelection  to  the  Town  Council, 
and  Consul  Flemming  here,  whom  I  knew  to  be 
possessed  of  great  personal  influence  in  my  ward, 
should  come  to  me  and  make  a  point  of  the  em- 
ployment of  some  man  on  our  tramway  system,  I 
would  be  likely  to  take  that  man  in  preference  to 
an  unknown  applicant,  unless  I  resisted  the  tempta- 
tion strongly.  That  is  the  great  danger  to  be  faced 
in  the  operation  of  any  municipal  system.  .  .  .  Not 
only  an  honest  but  an  economical  administration  of 
the  tramway  system  is  indispensable  to  success. 
The  private  companies  are  better  adapted  to  run  such 
systems,  because  they  realize  that  the  result  of  the 
employment  of  incompetent  men  will  be  to  reduce 
their  own  profits.  It  would  be  quite  possible  for 
you  to  have  a  municipally  owned  and  operated  tram 
system  which  would  be  conducted  with  scrupulous 
honesty  and  yet  would  be  a  failure.  Every  penny 
of  fare  might  be  collected  and  every  dollar  of  expense 


130      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

might  be  properly  accounted  for,  and  yet  at  the  same 
time  the  employment  of  incompetent  men  in  respon- 
sible positions  would  be  almost  as  bad  for  the  public 
as  if  they  were  dishonest." 


CHAPTER  VIII 

BIRMINGHAM 

Mr.  Joseph  Chamberlain,  Mayor  of  Birming- 
ham, in  1874,  in  a  speech  in  the  Birmingham  Town 
Council,  proposed  the  municipalization  of  the  gas 
works  in  these  words:  "I  distinctly  hold  that  all 
monopolies  which  are  sustained  in  any  way  by  the 
State  ought  to  be  in  the  hands  of  the  representatives 
of  the  people,  by  the  representative  authority  should 
they  be  administered,  and  to  them  should  the  profits 
go,  and  not  to  private  speculators.  In  the  second 
place  ...  I  am  always  inclined  to  magnify  my  office 
(of  Mayor).  I  am  inclined  to  increase  the  duties 
and  responsibilities  of  the  city  government,  in  whom 
I  have  myself  so  great  a  confidence,  and  I  will  do 
everything  in  my  power  to  constitute  these  city 
governments  real  local  parliaments,  supreme  in  their 
special  jurisdiction."  Under  the  influence  of  the 
spirit  thus  vigorously  expressed  by  Mr.  Chamberlain, 
Birmingham  has  surpassed  all  other  British  cities  in 
going  behind  and  overriding  the  Tramways  Act, 
1870.  That  act,  it  will  be  remembered,  gave  the 
local  authority  concerned  the  right  to  veto  any  appli- 

131 


132       MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

cation  from  a  company  to  the  Board  of  Trade  for  a 
charter  for  a  street  railway.  But  it  was  the  intention 
of  the  act  that,  if  a  local  authority  should  give  its 
consent  to  the  Board  of  Trade  issuing  a  street  rail- 
way charter  to  a  company,  it  should  give  it  without 
qualification,  in  consideration  of  the  charter  provid- 
ing for  compulsory  sale  at  structural  value  at  the 
close  of  twenty-one  years. 

Birmingham  gives  its  consent  only  on  the  follow- 
ing conditions :  The  city  is  to  build  the  street  railway 
for  which  the  company  holds  the  charter,  and  the 
Building  of  completed  property  is  to  be  held  by 
street  Railways  the  company  on  the  following  terms. 
discouraged  The   payment  for  the  first  fourteen 

years  of  an  annual  rental  of  4  per  cent  on  the 
cost  of  the  street  railway,  and  the  payment  for  the 
last  seven  years  of  an  annual  rental  of  5  per  cent. 
In  addition,  the  company  pays  each  year  into  a  sink- 
ing fund,  which  is  the  property  of  the  city,  a  sum 
equivalent  to  2.874  per  cent  of  the  cost  of  the  street 
railway.  That  sum,  at  compound  interest,  at  the 
expiration  of  twenty-one  years,  will  equal  the  city's 
outlay  upon  the  street  railway.  In  other  words,  at 
the  end  of  twenty-one  years  the  city  will  have  re- 
covered the  capital  invested  in  the  street  railway, 
and  in  the  meantime  it  will  have  received  respec- 
tively 4  per  cent  and  5  per  cent  upon  its  investment. 
Moreover,  the  city  at  all  times  will  be,  for  all  practical 
purposes,  exempt  from  the  possibility  of  losing  any 


BIRMINGHAM  133 

part  of  the  capital  invested;  for  the  company  must 
guarantee  the  fulfilment  of  the  agreement  to  pay 
respectively  4  per  cent  and  5  per  cent  a  year,  by  de- 
positing with  the  city  in  cash  50  per  cent  of  the  cost 
of  the  street  railway.  To  sum  up :  for  doing  noth- 
ing and  for  assuming  no  risk,  the  city  gets  respec- 
tively 4  per  cent  and  5  per  cent  on  the  cost  of  the 
street  railway,  and  is  repaid  its  whole  outlay  in  the 
course  of  twenty-one  years.* 

The  city  builds  only  the  street  railway  proper,  and 
the  company  holding  the  franchise  must  provide 
the  buildings,  rolling  stock,  and  other  necessary 
equipment.  At  the  expiration  of  the  twenty-one 
year  franchise  the  city  is  under  no  obligation  to  pur- 
chase any  part  of  the  company's  equipment.  The 
capital  invested  by  the  company  in  the  equipment 
can  obtain  no  return  until  all  operating  expenses 
have  been  paid,  including  sinking  fund  payments 
on  the  equipment,  and  the  city  has  been  paid  re- 
spectively 6.874  per  cent  and  7.874  per  cent  upon 
the  cost  of  the  street  railway  proper. 

Upon  these  onerous  terms,  capitalists  have,  of 
course,  been  very  reluctant  to  embark  in  street 
railway  ventures  in  Birmingham.  At  the  close  of 
1904,  Birmingham  and  its  suburbs,  with  a  popu- 
lation of  1,287,000  persons,  had  only  148.5  miles  of 
street  railway  track,  or  one  mile  of  track  for  each 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amendment 
Bills,  1886;  q.  1327  to  1338,  E.  O.  Smith,  Town  Clerk  of  Birmingham 
since  1881.     See  also:   The  Municipal  Year  Book,  1904,  p.  335. 


134      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

8700  inhabitants.  The  census  of  1901  showed 
that  there  were  living  in  Birmingham  proper  in  the 
Lack  of  Transit  overcrowded  condition  of  more  than 
Facilities  and       two  persons  in  one  room,  not  less  than 

Overcrowding         ^^  personS)  or    IO  33   per  cent  Qf 

the  population.  In  Dudley,  a  part  of  Greater  Bir- 
mingham, were  living  in  an  overcrowded  condition 
8519  persons,  or  17.48  per  cent  of  the  population. 
In  West  B'roomwich,  a  part  of  Greater  Birmingham, 
were  living  in  an  overcrowded  condition  6464  per- 
sons, or  10.2  per  cent  of  the  population.  Summar- 
izing this  matter,  one  finds  that  in  Birmingham 
proper  and  its  seven  leading  outlying  cities  or 
towns,  there  were  living  in  an  overcrowded  condi- 
tion 84,295  people,  or  8.4  per  cent  of  the  popu- 
lation. 

The  street  railways  in  Birmingham  proper  still 
are  operated  mainly  by  horse  power  and  steam 
power.  The  corporation  has  decided  not  to  enter- 
tain any  proposals  from  the  companies  at  present 
holding  franchises  to  convert  to  electric  traction,* 
but  to  let  the  present  franchises  run  out,  and  then 
to  convert  to  electric  traction  and  assume  operation. 
The  principal  franchises  will  expire  in  1906.  The 
corporation,  doubtless,  will  adhere  to  its  past  policy 
of  looking  upon  the  street  railway,  not  as  an  agency 
for  the  promotion  of  the  decentralization  of  the  popu- 
lation, but  as  an  agency  that  can  be  made  to  turn 

*  The  Municipal  Year  Book,  1904,  p.  336. 


BIRMINGHAM  135 

money  into  the  public  treasury.  But  while  the  people 
of  Birmingham  will  merely  be  "churned  up  within 
the  city  limits"  and  will  not  be  permitted  to  escape 
beyond  those  limits,  they  doubtless  will  derive  much 
comfort  from  indulging  the  habit  of  reflecting  upon 
the  fact  that  they  are  not  being  exploited  by  "private 
speculators,"  to  use  the  telling  slogan  of  that  astute 
politician,  Mr.  Joseph  Chamberlain. 


CHAPTER  IX 

MANCHESTER,    LEEDS,    LIVERPOOL,    SHEFFIELD,    AND 

BRISTOL 

Manchester  leased  the  city  tramways  to  a 
company  in  1875,  the  lease  to  expire  in  1901.  It 
failed  to  make  it  worth  while  for  the  lessee  to  con- 
vert to  electric  traction,  with  the  result  that  horse 
traction  was  retained  until  after  1901.  At  the  close 
of  1904,  Manchester,  with  its  suburbs,  had  673,000 
inhabitants,  and  150  miles  of  electric  street  railway 
track,  or  one  mile  for  each  4500  people.  In  1901, 
there  were  living  in  Manchester  proper,  34,147 
"overcrowded"  persons,  or  6.28  per  cent  of  the 
population.  In  1900,  Alderman  Southern,  who  for 
twenty-two  years  had  been  a  member  of  the  Man- 
chester City  Council,  testified  as  follows  before  a 
Parliamentary  Committee :  "Now  we  have,  of  course, 
outside  the  city,  plenty  of  useful  building  land,  where, 
if  these  workmen  could  get  to  and  from  their  work 
cheaply  and  quickly,  no  doubt  a  very  large  propor- 
tion of  our  congested  population  would  be  moved 
outside  the  city.  .  .  .  The  real  key  to  that  ques- 
tion of  overcrowding  lies  in  quick  and  rapid  transit 

136 


MANCHESTER  137 

to  the  suburbs."  *  In  June,  1904,  Mr.  McElroy, 
General  Manager  of  the  Manchester  Municipal  Tram- 
ways, testified  before  a  Select  Committee  of  the 
House  of  Commons,  that  "in  Manchester  the  trams 
ran  out  from  four  to  six  miles  in  every  direction,  and 
the  number  of  passengers  who  paid  the  full  fare  of 
8  cents  for  the  long  distance- was  only  0.25  per  cent 
of  the  whole.  Tramway  managers  knew  that  long- 
distance passengers  were  a  negligible  quantity."  f 
This  statement  was  made  in  support  of  the  argument 
that  it  was  not  necessary,  in  the  public  interest,  for 
Parliament  to  give  the  Tyneside  Tramways  and 
Tramroads  Co.  compulsory  running  powers  over 
certain  of  the  tramways  belonging  to  the  city 
of  Newcastle.  The  company  had  asked  these 
powers  in  order  that  it  might  develop  traffic  between 
Newcastle  and  Tyneside.  In  1904,  Newcastle  had 
one  mile  of  track  for  each  5500  inhabitants;  and  in 
1 90 1  there  were  living  in  Newcastle  in  an  over- 
crowded condition,  65,605  people,  or  30.47  per  cent 
of  the  population.  Mr.  John  Young,  Manager  of 
the  Glasgow  Municipal  Tramways,  supported  Mr. 
McElroy.  In  1904,  the  city  of  Manchester  had 
spent  upon  its  street  railways  the  sum  of  $7,428,000, 
which  called  for  $263,555  interest.  After  paying 
that  interest  and  sinking  fund  contributions,  and 
crediting    the   reserve    renewals    and    depreciation 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900; 
q.  2403  to  2415. 

t  The  Municipal  Journal,  June  10,  1904. 


138      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

account  with  $350,000,  the  city  had  left  $250,000 
which  it  contributed  "in  relief  of  the  rates."  *  It  is 
obvious  that,  if  the  city  should  abandon  the  policy 
of  operating  the  street  railways  primarily  in  the  in- 
terest of  the  taxpayer,  it  could  give  great  relief  to 
the  congested  population  by  more  than  doubling 
the  present  street  railway  mileage.  The  surplus  of 
$250,000  earned  by  the  existing  street  railways 
would  "carry"  a  large  mileage  of  street  railways 
that  earned  no  more  than  operating  expenses  or  not 
even  that  much. 

LEEDS 

The  city  of  Leeds  purchased  the  street  railways 
from  the  company  in  1894.  It  postponed  until 
1897  the  conversion  to  electric  traction.  At  the 
close  of  1894  it  had  437,000  inhabitants  and  82 
miles  of  street  railway  track,  or  one  mile  for  each 
5300  people.  In  1901,  not  less  than  10.08  per  cent 
of  the  population,  or  43,239  persons,  lived  in  an  over- 
crowded condition.  In  1900,  Mr.  W.  J.  Jeeves, 
town  clerk  of  Leeds,  testified  as  follows  before  a 
Parliamentary  Committee:  "Then  when  we  come 
to  tramways,  there  again  I  am  more  and  more  con- 
vinced that  they  are  an  absolute  necessity  in  large 
communities ;  and,  as  a  matter  of  fact,  I  see  no  other 
possible  solution  of  the  difficulty  of  housing  the 
working  classes,  indeed  I  may  say  the  housing  of 

*  The  Municipal  Journal,  July  8,  1904. 


SHEFFIELD  139 

the  bulk  of  the  community,  not  merely  the  working 
classes,  but  clerks  and  so  on."  * 

In  1903  the  city  of  Leeds  had  expended  upon  the 
street  railways  $5,200,000.  In  that  year  it  paid  in 
interest  $133,335;  contributed  $71,935  to  the  sink- 
ing fund ;  laid  aside  $70,520  for  depreciation,  and  had 
left  a  balance  of  $310,000.  The  latter  sum  would 
justify  the  city  of  Leeds  more  than  doubling  the 
street  railway  mileage  which  it  now  puts  at  the 
service  of  its  citizens. 

LIVERPOOL 

Liverpool  purchased  the  tramways  in  1897,  and 
equipped  them  for  electric  traction  in  1898.  At  the 
close  of  1904,  Liverpool  and  its  suburbs  had  673,000 
people  and  103  miles  of  street  railway  track,  or  one 
mile  of  track  for  each  7400  people.  At  the  close  of 
1902,  the  city's  investment  in  street  railways  was 
$9,165,000.  After  paying  interest  and  sinking  fund 
charges,  contributing  $140,000  to  a  reconstruction 
and  extension  fund,  as  well  as  $250,000  to  a  reserve 
fund,  the  tramway  contributed  $125,000  "in  aid  of 
the  rates." 

SHEFFIELD 

The  city  of  Sheffield  began  the  conversion  to 
electricity  in  1899,  and  had  not  completed  it  in 
March,  1903.     At  the  close  of  1904,  Sheffield  had 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900 ; 
q.  3046. 


140      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

412,000  inhabitants  and  65  miles  of  street  railway 
track,  or  one  mile  for  each  6300  inhabitants.  In 
1 90 1  there  were  living  in  Sheffield  in  an  overcrowded 
condition  not  less  than  36,159  persons,  or  9.5  per 
cent  of  the  population. 

BRISTOL 

Bristol  is  the  only  large  English  city  in  which  the 
street  railways  are  owned  by  a  company.  The  com- 
pany obtained  its  first  charter  in  1872;  charters  for 
additional  lines  were  obtained  in  1875,  1876,  1877, 
1879,  1880,  1881,  1882,  1887,  1890,  1894,  1896, 
1897,  and  1898.  Some  time  after  the  city  had  the 
right  to  purchase  that  part  of  the  lines  covered  by 
the  original  charter,  the  city  made  a  contract  with 
the  company  agreeing  not  to  purchase  the  original 
lines  before  19 15,  nor  to  purchase  the  later  lines 
before  19 18  and  1928  respectively.*  On  the  strength 
of  that  agreement,  the  company  began  the  conver- 
sion to  electric  traction  in  1895,  and  felt  justified  in 
giving  the  public,  by  the  close  of  1904,  57  miles  of 
street  railway  track,  or  one  mile  of  track  for  each 
5700  people.  A  still  longer  extension  of  the  charter, 
together  with  the  waiving  of  the  compulsion  to  sell 
at  structural  value,  would  have  induced  the  company 
to  provide  more  liberal  facilities.  In  1901  there 
were  living  in  a  overcrowded  condition  in  Bristol, 
11,687  persons,  or  3.55  per  cent  of  the  population. 

*  Duncan's  Manual  of  Tramways,  Omnibuses,  and  Electric  Railways, 
1904. 


CHAPTER  X 

GREATER  LONDON* 

Shortly  after  the  Tramways  Act,  1870,  was 
passed,  companies  applied  for  charters  for  tramways 
in  93  miles  of  street  of  Metropolitan  London. f 
The  Metropolitan  Board  of  Works  was  one  of  the 
local  authorities  whose  consent  had  to  be  obtained, 
and  it  rejected  applications  covering  28  miles 
of  street.  The  motives  of  the  Metropolitan  Board 
of  Works  are  illuminating.  To  begin  with,  the 
Board  stated  that  the  tramway  traffic  had  de- 
veloped to  an  extent  the  Board  had  not  anticipated. 
The  advantages  to  the  public  from  the  increased 
facilities  and  the  lowering  of  the  omnibus  fares  J 
were  so  great  that  "it  was  an  absolute  necessity  that 
they  be  extended  as  far  as  possibly  could  be  done, 
for  the  general  convenience  of  the  public."  The 
Board  was  much  impressed  with  the  argument  that 

*  Area,  693  square  miles;   population  at  the  close  of  1904,  6,833,000. 

t  Metropolitan  London  at  that  time  had  an  area  of  1 1 7  square  miles. 

X  Report  of  Committee  on  Metropolitan  Tramways,  1872;  q.  11. 
George  Hopkins,  Engineer  to  Tramway  Companies  in  London,  Dublin, 
Liverpool,  and  Glasgow :  "  In  London  the  tramways  already  have  re- 
duced the  omnibus  fares  by  one-half." 

141 


142    MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

the  tramways  should  be  used  for  the  purpose  of 
carrying  the  people  to  and  from  the  suburbs.  There- 
fore it  gave  its  consent  to  almost  all  the  suburban 
lines.  Nevertheless  the  Board  refused  consent  for 
many  lines  which  were  to  give  the  suburban  lines 
access  to  the  heart  of  the  city,  and  thus  left  the  sub- 
urban lines  hanging  in  the  air.  The  Board  refused 
that  consent  because  it  had  had  "very  influential 
deputations  from  shop-keepers  in  streets  used  by  the 
carriages  of  the  wealthy"  and  in  other  cases  because 
it  believed  that  the  establishment  of  tramways 
"would  deteriorate  the  value  of  property."  The 
Board  of  Works  also  acted  on  the  doctrine  that  it 
was  not  necessary  to  build  tramways  in  streets  along 
which  the  omnibuses  had  not  established  routes. 
Where  there  were  no  omnibuses,  there  was  no  traffic ; 
and  where  there  was  no  traffic,  there  was  no  need  of 
tramways,  argued  the  Metropolitan  Board  of  Works.* 
It  was  necessary  to  get  the  consent  of  every  vestry 
concerned,  as  well  as  that  of  the  Metropolitan  Board 
of  Works.  Some  vestries  were  ready  to  sell  their 
Local  and  Class  consent>  others  refused  it  on  the  ground 
interests  check  that  charters  should  not  be  given  to 
Development  of  <  *  private  speculators,  "and  still  others 
refused  it  on  the  ground  "that  the 
tramway  question  was  not  yet  sufficiently  advanced  to 

*  Report  o)  Committee  on  Metropolitan  Tramways,  1872,  q.  449,  452, 
471,  473,  453,  and  459,  testimony  of  Mr.  William  Newton,  late  Chairman 
of  the  Parliamentary  Committee  of  the  Metropolitan  Board  of  Works. 
See  also  q.  787,  788,  and  n  72. 


GREATER   LONDON  143 

enable  them  to  come  to  any  decision  upon  it."  *  As 
early  as  May,  1871,  the  Board  of  Trade  reported :  "It 
will  be  seen  from  the  above  report,  that  under  the 
conditions  imposed  by  the  Act  of  last  session,  the 
Board  of  Trade  have  been  unable  to  lay  before 
Parliament  a  complete  and  perfect  scheme  for 
tramways  in  the  metropolis.  And  it  will  be  obvious 
that  in  the  present  state  of  divided  jurisdiction  be- 
tween the  city  of  London,  the  Metropolitan  Board, 
and  the  Vestries,  it  is  impossible  to  look  for  any  such 
united  action  on  the  part  of  the  authorities  as  is 
necessary  for  the  maturing  of  a  perfect  scheme,  and 
as  may  be  found  in  other  places  where  there  is  one 
supreme  municipal  authority."  But  down  to  this 
day,  September,  1905,  the  British  Parliament  has 
not  dared  to  go  counter  to  the  local  and  class  in- 
terests that  oppose  the  enactment  of  a  law  under 
which  it  would  be  possible  to  supply  Metropolitan 
London  with  street  railways. 

In  1 87 1  and  1872  it  was  often  suggested  that  the 
Metropolitan  Board  of  Works  put  an  end  to  the 
evils  arising  from  divided  jurisdiction  by  asking 
Parliament  to  give  the  Board  exclusive  control  of 
the  streets  in  order  that  the  Board  might  itself  build 
a  unified  and  comprehensive  system  of  tramways. 
But  the  Metropolitan  Board  replied  that  its  members 
were  appointed  to  the  Board  by  the  Vestries,  and 

*  Tramways  {Metropolis).  Report  of  the  Proceedings  of  the  Board 
of  Trade  under  the  Tramways  Act,  1870,  with  regard  to  the  Proposed 
Tramways  in  and  about  the  Metropolis.     Document  No.  211,  1871. 


144    MUNICIPAL  OWNERSHIP  IN  GREAT   BRITAIN 

that  if  the  Board  should  take  any  such  radical  action 
"there  would  be  likely  to  be  a  big  change  in  the 
make-up  of  the  Board."  *  Again,  to  quote  the  words 
of  Mr.  William  Newton,  Chairman  of  the  Parliamen- 
tary Committee  of  the  Metropolitan  Board  of  Works 
on  Tramways:  "In  the  uncertain  state  of  the  public 
mind  as  to  whether  tramways  would  be  successful 
or  not,  it  would  have  been  almost  impossible  for  a 
public  and  representative  Board  to  have  adopted  the 
scheme  at  that  time.  The  system  was  altogether 
undeveloped;  there  were  grave  doubts  about  its 
ultimate  success,  and  altogether  it  was  a  speculative 
thing.  .  .  .  Again,  if  the  Board  had  built  to  lease, 
there  would  not  have  been  much  competition  among 
the  persons  desiring  to  become  lessees  because  there 
were  not  many  persons  sanguine  of  the  success  of 
tramways ;  and  altogether  the  Board  considered  that 
it  would  be  better  to  allow  private  capital  to  develop 
the  scheme.  .  .  .  And  at  the  end  of  the  twenty-one 
years,  when  we  had  all  the  experience  that  commer- 
cial enterprise  would  develop,  we  should  be  able  to 
take  possession."  f  These  words  of  Mr.  Newton 
describe  the  attitude  which  the  British  municipal 
authorities  have  taken  successively  to  the  horse 
tramway,  the  electric  light,  the  electric  tramway, 
the  telephone,  and  the  electric  power  plant.     The 

*  Report  of  Committee  on  Metropolitan  Tramways,  1872;  q.  1419, 
J.  W.  Bazalgette,  Engineer  to  Metropolitan  Board  of  Works. 

t  Report  of  Committee  on  Metropolitan  Tramways,  1872;  q.  450, 
Mr.  William  Newton. 


GREATER   LONDON  145 

municipality  can  contribute  nothing  to  progress,  but 
must  leave  such  work  to  commercial  enterprise, 
which  is  invited  to  undertake  the  work  of  developing 
new  industries  on  the  basis  of  "heads  I  win,  tails 
you  lose,"  the  municipality  standing  in  the  position 
of  "I  win." 

In  1872  there  were  so  many  applications  for 
charters  for  tramways  in  Metropolitan  London  that 
Parliament  came  to  fear  lest  it  had  accorded  too 
Parliamentary  liberal  terms  in  the  Tramways  Act, 
Committee  0/1X72  1870.  Accordingly  the  House  of  Com- 
mons appointed  a  select  committee  of  five  members 
"to  join  with  a  committee  of  the  Lords  to  inquire 
into  the  question  of  Metropolitan  Tramways  pro- 
posed to  be  sanctioned  by  Bills  in  the  present  session, 
and  to  report :  whether  it  is  desirable  or  not  that  any 
fresh  tramways  be  laid  within  the  metropolitan  area ; 
under  what  authority  the  construction  and  working 
of  Metropolitan  Tramways,  if  any,  should  be  placed ; 
along  what  lines  of  streets,  if  any,  tramways  should 
be  allowed  to  be  constructed,  and  under  what  restric- 
tions." * 

Before  the  Parliamentary  Committee  of  1872, 
Captain  H.  W.  Tyler,  Inspecting  Officer  of  the 
Board  of  Trade,  testified  that  tramways  tended  to 
clear  crowded  streets  and  that  Parliament  should 
fix  no  minimum  width  as  to  streets  in  which  tram- 
ways should  be  permitted.     Mr.  Newton,  late  Chair- 

*  Hansard's  Parliamentary  Debates,  March  8,  1872,  p.  1620. 


146      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

man  of  the  Parliamentary  Committee  of  the  Metro- 
politan Board  of  Works,  said:  "I  do  not  think  that 
the  crowded  nature  of  the  thoroughfare  has  much 
to  do  with  the  question  of  whether  a  tramway  should 
be  laid.  ...  If  there  is  room  for  a  vehicle  to  stand 
between  the  tramway  and  the  kerb,  a  tramway  is  a 
regulator  of  the  traffic  rather  than  an  obstructor." 
Mr.  Haywood,  Engineer  to  the  Commissioners  of 
Sewers  (the  road  authority)  for  the  city  of  London, 
said  that  it  would  be  inadvisable  for  Parliament  to 
lay  down  a  minimum  width  as  to  streets  in  which 
tramways  might  be  laid,  for  such  action  would  re- 
strict development.*  The  testimony  of  these  wit- 
nesses was  supported  by  the  testimony  given  in  1871 
by  the  Superintendents  of  Police  for  the  Divisions  of 
Whitechapel,  Stepney,  Lambeth,  Camberwell,  and 
Greenwich,  which,  in  turn,  had  been  indorsed  by 
the  Board  of  Trade.f 

The  tramway  companies  introduced  evidence  to 
the  effect  that  "as  the  tramways  were  brought  nearer 
to  the  heart  of  the  city,  the  tramway  for  the  whole 
distance  was  more  generally  used,  proving  the  great 
importance  to  the  public  of  getting  to  the  great 
centres  of  traffic."  They  asked  for  permission  to 
establish  great  through  routes  running  north  and 


*  Report  of  Committee  on  Metropolitan  Tramways,  1872;    q.   102 1, 

1089,  453.  455.  685»  and  74i- 

t  Tramways  (Metropolis).  Report  of  the  Board  of  Trade  under  the 
Tramways  Act,  1870,  with  regard  to  the  Proposed  Tramways  in  and  about, 
the  Metropolis,  Document  No.  211,  1871. 


GREATER   LONDON  147 

south  and  east  and  west,  promising  to  give  through 
tickets  and  other  accommodations  that  would  pro- 
mote traffic.  The  Engineer  to  the  Commissioners 
of  Sewers  for  the  city  of  London  said  that  if  a 
complete  system  of  tramways  were  established,  the 
omnibuses  would  disappear.* 

Mr.  J.  W.  Bazalgette,  Engineer  to  the  Metropolitan 
Board  of  Works,  appeared  before  the  Parliamentary 
Committee  to  advance  the  fantastic  motion  that  the 
asphalt  pavement  soon  would  be  brought  to  such  a 
stage  of  perfection  that  the  public  would  have  no 
further  need  of  street  railways;  that  thereafter  the 
street  railway  would  be  merely  a  nuisance,  because 
it  would  be  in  the  way  of  the  ordinary  vehicles  which 
would  move  with  such  ease  over  the  asphalt  that  the 
public  would  have  no  further  need  of  street  railways.f 
The  Select  Committee  of  1872  indorsed  this  motion, 
and  reported  that  it  would  be  inexpedient  by  the  es- 
tablishment of  vested  interests  in  important  streets 
to  prejudice  the  introduction  of  new  modes  of  laying 
down  the  surface  (asphalt),  which  may  have  the 
effect  of  benefiting  all  kinds  of  traffic  equally,  with- 
out creating  any  monopoly  in  the  use  of  the  public 
thoroughfare. 

The  Select  Committee  reported:  "The  expe- 
diency of  laying  down  any  fresh  tramways  within 

*  Report  of  Committee  on  Metropolitan  Tramways,  1872;  q.  234, 
252,  689,  605  to  609,  253,  686,  and  337. 

t  Report  of  Committee  on  Metropolitan  Tramways,  1872;  q.  1381,  1408, 
1409,  1432,  and  1433. 


148      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

the  metropolitan  area  must  in  a  great  measure  de- 
pend upon  the  nature  of  the  roads  or  streets  over 
which  it  is  proposed  to  carry  them.  In  the  suburban 
districts  some  extension  may  be  very  desirable  for 
the  convenience  of  the  public,  but  in  the  streets  of 
the  Metropolis,  every  extension  should  proceed  with 
the  greatest  caution.  .  .  .  We  are  far  from  being 
insensible  to  the  advantages  attaching  to  the  construc- 
tion of  tramways  by  an  authority  having  entire  con- 
trol over  the  tramway  and  roadway,  and  able  to 
devote  the  profits  arising  from  the  undertaking  to 
the  relief  of  the  rates.  We  think  it,  however,  pre- 
mature to  discuss  in  any  detail  the  question  of  cen- 
tral management  of  Metropolitan  Tramways  by  a 
municipal  authority  which  has  yet  to  be  created, 
though  we  are  of  opinion  that  when  such  an  authority 
is  established,  every  facility  should  be  afforded  to 
enable  it  to  obtain  possession  of  the  tramways  by 
purchase  upon  fair  terms,  at  the  earliest  period.  .  .  . 
The  committee  finally  are  of  opinion  that  the  fullest 
consideration  should  be  given  by  (future)  committees 
(on  Private  Bills)  to  the  interest  of  the  public  in 
the  use  of  the  streets  as  well  as  of  the  owners  and 
occupiers  of  the  adjoining  houses.  With  these  pre- 
cautions, the  committee  do  not  see  any  objection  to 
the  construction  of  tramways  by  private  enterprise." 
The  Bazalgette  episode  of  1872  recalls  to  mind 
the  fact  that  at  the  present  moment  a  number  of 
British  municipalities  are  checking  the  extension  of 


GREATER   LONDON  149 

the  municipal  tramways  from  apprehension  lest 
the  motor  omnibus  shall  displace  the  tramways. 
Eastbourne,  a  city  of  50,000  people,  has  gone  so  far 
as  to  refuse  to  install  a  street  railway  system;  it 
gives  the  public  a  system  of  motor  omnibuses.  The 
Tramways  Committee  of  Wolverhampton  (popu- 
lation, 96,000)  recently  has  recommended  the 
abandoning  of  a  proposed  new  tramway  route  and 
the  installation  of  a  motor  omnibus  service  over  the 
route  in  question.*  The  city  council  of  Shoreditch, 
a  part  of  Metropolitan  London,  having  a  population 
of  124,000,  recently  passed  the  resolution :  "That  the 
London  County  Council,  the  borough  councils 
north  of  the  Thames,  and  the  North  Metropolitan 
Tramway  Co.,  be  requested  to  consider  the  pos- 
sibility of  adopting  a  system  of  automobile  tram- 
cars,  driven  by  petrol  or  other  engines,  with  a  view 
to  avoiding  the  heavy  expense  and  immense  public 
inconvenience  and  loss  which  will  be  caused  by  the 
construction  of  a  conduit  or  overhead  electric  system. 
That  the  London  County  Council  be  requested  to 
arrange  with  the  North  Metropolitan  Tramway 
Co.  for  the  trial  of  an  experimental  petrol  or 
other  motor  car  concurrently  with  the  horse  trams."  f 
South  Shields  has  97,000  inhabitants,  and  3.25 
miles  of  horse  tramway,  which  are  leased  to  a  com- 
pany.    The  city  contemplates  terminating  the  lease 

*  The  Municipal  Journal,  February  17,  1905. 
t  The  Municipal  Journal,  February  3,  1905. 


150      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

in  1906.  Since  1903  it  has  had  authority  from  Parlia- 
ment to  build  an  additional  twelve  miles  of  track. 
In  February,  1905,  the  Ratepayers'  Association  of 
South  Shields  passed  a  unanimous  resolution  urging 
the  Town  Council  not  to  accept  any  tender  for  the 
laying  down  of  tram  lines  until  it  had  fully  inquired 
into  the  advisability  of  running  motor  omnibuses  in 
the  place  of  the  (contemplated)  electric  cars.*  Early 
in  February,  1905,  a  "conference  was  held  in  London 
of  representatives  of  municipalities  owning  tram- 
ways. Mr.  Boyle  (Chairman  of  the  Manchester 
Corporation  Tramway  Committee)  presided.  The 
conference  considered  the  clauses  which  several 
(steam)  railway  companies  have  introduced  in  their 
Bills  for  the  present  session  of  Parliament,  enabling 
them  to  provide  motor  omnibuses,  which  they  would 
be  entitled  to  use  without  any  restriction  (i.e.  in 
competition  with  tramways).  A  resolution  was 
adopted  condemning  this  proposal,  but  expressing  the 
opinion  that  there  would  be  no  objection  to  it  if  the 
powers  sought  by  the  railway  companies  were 
limited  to  the  provision  of  motor  omnibuses  carrying 
traffic  to  and  from  the  companies'  railway  stations, 
subject  to  the  proviso  that  such  vehicles  should  be 
licensed  by  the  local  authority  in  whose  district  they 
are  to  be  used."  f 
Let  us  turn  now  from  the  consideration  of  the  situa- 

*  The  Municipal  Journal,  February  24,  1905. 
t  Ibid.,  February  17,  1905. 


GREATER   LONDON  151 

tion  in  the  early  seventies  to  the  consideration  of  the 
situation  in  more  recent  times.  Let  us  begin  with 
Recent  oppod-  the  arguments  made  in  the  House 
tion  to  Tram-        of   Commons   in    1 89 1   and  1892,  in 

■ways  by  Private     each   of   which  g    the   House   de_ 

Interests  ,  .„ 

feated  a  Bill  authorizing  a  street 
railway  over  Westminster  Bridge  for  the  purpose  of 
connecting  the  tramways  south  and  north  of  the 
Thames.  In  both  cases  the  rejection  of  the  Bill  was 
moved  by  Sir  Algernon  Borthwick,  "on  behalf  of  the 
West  End  Ratepayers'  Association,  who  have  success- 
fully defeated  a  series  of  these  measures."  *  Sir 
Dixon-Hartland  seconded  the  motion  for  rejection. 
His  arguments  were  that  the  House  should  not  allow 
a  tramway  company  "to  take  possession  of  the  best 
thoroughfare  in  London  in  order  that  they  might 
realize  a  private  profit  from  it,"  and  that  there  was 
"nothing  owners  and  drivers  of  carriages  dislike 
more  than  the  twisting  of  their  wheels  by  the  tram- 
way metals."  f  General  Fraser,  representing  the 
"Tradesmen  of  Westminster  Bridge  Road,"  opposed 
the  Bill.  Mr.  Radcliffe  Cooke  informed  the  House 
that  "one  Honorable  Member  who  is  going  to  vote 
against  the  measure  told  me  that  in  taking  a  certain 
drive  in  his  carriage  he  had  to  pass  over  tram  rails 

*  Hansard's  Parliamentary  Debates,  May  7,  189 1,  p.  245;  and 
February  29,  1892,  p.  1488. 

t  Ibid.,  May  7,  1891,  p.  246;  and  February  29,  1892,  p.  1474.  Dixon- 
Hartland,  Sir  F.  J.,  Middlesex  County  Alderman  and  Chairman  of 
Finance  Committee;  Director  of  London  City  and  Midland  Bank. 
—  Who's  Who,  1905. 


152      MUNICIPAL  OWNERSHIP   IN  GREAT   BRITAIN 

thirty-two  times,  and  he  was  jolted  very  much." 
Mr.  T.  P.  O'Connor  *  argued  that  tramcars  wore  out 
the  roadway  and  thus  raised  the  fares  charged  by 
the  hansom  cabs.  He  said  that  in  New  York  City 
"it  was  impossible  to  go  for  any  distance  in  a  han- 
som for  less  than  one  dollar,  and  the  reason  was 
solely  the  wear  and  tear  of  the  roads  by  the  tramcars. 
I  ask  the  House  to  set  its  face  stolidly  against  these 
attempts  to  introduce  the  tramway  system  into  the 
centre  of  London.  London  ought  to  be  maintained 
as  a  comfortable  place  of  residence,  and  certainly  it 
will  cease  to  be  so,  if  this  noisy  tramway  system  is  in- 
troduced all  over  the  Metropolis.  ...  If  the  working 
classes  want  to  cross  the  bridge,  they  can  find  plenty 
of  half -penny  omnibuses  to  take  them."  Mr. 
Cunninghame  Graham  said:  "Although  I  am  most 
desirous  that  every  facility  should  be  afforded  to  the 
working  classes  for  getting  to  their  work,  unless  I 
receive  an  assurance  that  the  company  will  limit  the 
working  hours  to  ten  per  day,  I  shall  certainly  vote 
for  the  Amendment"  (to  reject  the  Bill).  Mr. 
Cremer,  who  represented  Shoreditch,  which  has 
35,529  persons,  or  29.95  Per  cen^  °f  ^ts  population, 
living  in  an  overcrowded  condition,  could  not  con- 
sent to  relief  being  afforded  by  a  company  that  would 
not  accept  the  London  County  Council's  dictation 
that  the  hours  of  work  must  be  limited  to  ten  a  day. 

*  O'Connor,  T.  P.,  late  editor  of  the  Sun  and  Weekly  Sun;  editor 
of  M.A.P.  and  T.P.'s  Weekly.  — Who's  Who,  1905. 


GREATER   LONDON  153 

In  the  House  of  Lords,  Lord  Carrington  said: 
"And  the  frontagers  are  backed  up  by  the  Tramways 
Defence  Association,  which  is  an  association  inter- 
ested in  ordinary  wheel  traffic  (i.e.  of  owners  of  om- 
nibuses and  cabs),  and  that  is  the  old  question  rather, 
as  in  the  old  days,  of  stage-coaches  against  railroads. 
...  I  may  say  briefly  that  the  congestion  of  traffic 
at  the  end  of  Westminster  Bridge  (caused  by  the 
tramway  coming  to  a  dead  stop)  is  not  only  incon- 
venient, but  it  is  a  great  and  positive  and  serious 
danger.  Besides  the  5500  passengers  carried  every 
week  in  omnibuses  over  Westminster  Bridge  past 
this  dead  end  (of  the  tramway,  where  the  horses  have 
to  be  taken  out)  there  are  200,000  persons  every 
week  who  have  to  get  out  of  the  trams  and  walk 
over  the  bridge.  It  matters  not  what  the  weather 
is,  they  must  get  out  in  the  middle  of  the  road, 
women  and  children,  and  walk  through  the  mud. 
To  help  those  people  there  are  the  half-penny 
omnibuses  which  your  Lordships  may  see  —  the 
little  omnibuses  which  carry  ten  persons,  and  which  it 
is  calculated  pass  the  end  of  Parliament  Street  777 
times  a  day.  Now  if  the  tramway  was  allowed  to 
pass  this  House  and  was  made  up  to  this  end, 
all  those  omnibuses  would  be  run  off  the  road,  of 
course."*  Lord  Lamington  said:  "If  your  Lord- 
ships think  it  desirable  to  have  tramways  throughout 
the  West  End,  then  you  must  vote  for  the  Bill;  but 

*  Hansard's  Parliamentary  Debates,  June  14,  1892,  p.  1011. 


154    MUNICIPAL   OWNERSHIP    IN    GREAT   BRITAIN 

otherwise  you  should  not  pass  this  Bill,  because  it  is 
only  an  excuse  for  making  a  great  centre  for  a  general 
tramway  system." 

From  the  consideration  of  the  nature  of  the  op- 
position to  tramways  exercised  by  private  interests, 
let  us  turn  to  the  consideration  of  the  character  of 
Misuse  of  Veto  the  opposition  exercised  by  the 
Power  by  Bor-  public  authorities,  namely,  the  Met- 
oughs  and  County  ropolitan  Boroughs,  twenty-seven  in 
number,  and  the  London  County  Coun- 
cil. In  1902,  Mr.  John  Burns,  a  member  of  the  House 
of  Commons,  as  well  as  a  member  of  the  London 
County  Council,  spoke  as  follows:  "In  three  sessions 
of  Parliament  thirty-eight  proposals  for  extensions 
and  improvements  of  tramways  (proposed  by  the 
London  County  Council)  have  been  vetoed  by  the 
Borough  Councils  in  London.  In  nearly  all  those 
cases,  the  veto  in  my  opinion  was  unreasonably 
exercised.  Some  of  the  vetoes  by  Borough  Councils 
of  County  Council  projects  have  been  unreasonable ; 
some  have  been  factious  and  some  have  been  almost 
on  the  verge  of  blackmailing  the  tramway  authorities 
(the  London  County  Council)  for  local  street  im- 
provements to  an  extent  the  Borough  Councils  ought 
not  to  have  been  guilty  of.  .  .  .  That  is  a  very 
serious  condition  of  things,  and  it  can  only  be  got 
over  by  tolerant  and  more  harmonious  relations  be- 
tween the  County  Council  and  the  Borough  Councils. 
.  .  .    The  condition  of  things  has  been  a  scandal 


GREATER   LONDON  155 

in  the  past,  is  a  disgrace  to  the  present,  and  ought 
to  be  avoided  in  the  future.  .  .  .  Battersea  should 
not  be  factiously  allowed  to  prevent  the  people  of 
Lambeth  (of  whom  36,904,  or  12.22  per  cent,  are 
overcrowded)  from  having  access  to  Wandsworth 
Common,  simply  because  the  Wandsworth  Borough 
Council,  for  political  reasons,  dislikes  the  London 
County  Council."  *  In  the  course  of  the  same 
debate,  Sir  J.  Dickson-Poynder  said :  "He  had  often 
been  told  that  he  was  an  undue  advocate  of  the 
London  County  Council.  He  probably  thought 
there  was  more  good  in  that  body  than  did  many  of 
his  honorable  friends,  but  at  the  same  time  he  was 
by  no  means  blind  to  its  defects.  That  body  had 
laid  down  a  principle  —  from  which,  under  no  cir- 
cumstances, would  it  deviate  —  that  all  tramway 
schemes  within  the  area  of  the  London  County 
should  belong  solely  to  the  London  County  Council. 
If  Borough  Councils  had  in  the  past  been  arbitrary 
in  the  exercise  of  this  power  of  veto  on  schemes  pro- 
moted by  the  London  County  Council,  so  also  had 
the  latter  body  been  most  arbitrary  in  vetoing 
schemes,  many  of  them  most  admirable  schemes, 
promoted  by  private  companies."  f 

The  Report  of  the  Royal  Commission  upon  the 
Means  of  Locomotion  and  Transport  in  London, 
July,  1905,  says   that    the   London    County  Coun- 

*  Hansard's  Parliamentary  Debates,  May  15,  1902,  p.  447. 
t  Ibid.,  May  15,  1902,  p.  459. 


156    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

cil*  has  consistently  used  the  power  of  veto  to  the 
exclusion  of  private  promoters  from  the  County  of 
London,  and  that  the  Corporation  of  London  f  in- 
variably has  used  its  power  of  veto  against  all  comers. 
The  report  adds  that  "the  strongest  opposition  to 
the  abolition  of  the  veto  comes  from  the  Corporation 
of  the  city  of  London  and  its  officers.  The  London 
County  Council  would  like  to  see  the  right  of  veto 
abolished  in  the  case  of  the  Metropolitan  Borough 
Councils  and  the  Corporation  of  the  city,  but  wishes 
to  retain  its  own  right  of  veto  against  the  private 
promotion,  and  objects  to  submitting  its  tramway 
schemes  to  a  Traffic  Board,  preferring  that  they 
should  go  direct  to  Parliament. 

"On  the  other  hand,  independent  witnesses,  whose 
experience  gives  great  weight  to  their  testimony,  are 
in  favor  of  the  abolition  of  the  veto.  Mr.  J.  W. 
Lowther,  M.P.,  at  the  time  Chairman  of  Commit- 
tees and  now  Speaker  of  the  House  of  Commons, 
expressed  a  strong  opinion  that  the  power  of  vetoing 
tramways  had  worked  a  great  deal  of  mischief ;  that 
the  Standing  Order  had  been  most  improperly  used 
for  the  purpose  of  extorting  all  sorts  of  terms  and 
conditions  from  tramway  companies,  and  had  sub- 
jected them  to  liabilities  and  disabilities  which  were 
never  contemplated  by  Parliament.  Mr.  Albert 
Gray,  K.C.,  Counsel  to  the  Chairman  of  Commit- 

*  The  London  County  Council  was  established  in  1889,  upon  the 
abolition  of  the  Metropolitan  Board  of  Works, 
t  Area,  one  square  mile. 


GREATER   LONDON  157 

tees  of  the  House  of  Lords,  expressed  the  same 
opinion,  and  said  that  the  veto  was  extremely  det- 
rimental to  tramway  enterprise,  and  bad  for  the 
municipal  bodies  themselves.  We  were,  unfor- 
tunately, unable  to  obtain  the  evidence  of  the  late 
Lord  Morley,  Chairman  of  Committees  of  the  House 
of  Lords,  but  we  observe  that  both  on  August  2, 
1900,  and  July  11,  1901,  he  expressed,  in  the  House 
of  Lords,  opinions  in  favor  of  the  abolition  of  the 
present  right  of  veto  by  small  local  bodies,  and  added 
that,  if  the  veto  was  placed  in  the  hands  of  large 
bodies  like  CountyCouncils,  much  harm  would  not 
be  done. 

"There  is  no  doubt  that  tramway  development 
has  been  seriously  checked  by  the  operation  of  these 
vetoes,  and,  although  it  is  not  suggested  that  any 
unworthy  use  has  been  made  of  them  in  London, 
it  is  clear  that  the  veto  is  sometimes  exercised  with- 
out due  regard  to  the  importance  of  establishing 
through  tramway  communication. 

"We  have  come  to  the  conclusion  that  the  best 
course  is  to  abolish  the  veto  in  all  cases,  but  to  provide 
that,  in  'Greater  London,'  the  County  Councils  and 
the  Corporation  of  the  city  of  London  shall  have  a 
preferential  right  to  construct  any  tramways,  within 
their  districts,  if  they  are  prepared  to  do  so.  .  .  . " 

At  the  close  of  1904,  Greater  London,  with  an 
area  of  693  square  miles,  and  6,833,000  inhabitants, 


158    MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

had  203  route  miles  of  street  railway,  or  less  than 
inadequacy  of  one  mile  of  track  for  each  16,800 
Tramway  Service  people.  "  Insufficiency  of  mileage  is 
not  the  only  defect  of  the  tramway  service  in  Lon- 
don," adds  the  Royal  Commission  on  the  Means  of 
Locomotion  and  Transport  in  London.  "  Within 
the  County  of  London  *  nearly  the  whole  of  the 
tramways  are  owned,  and  in  great  part  are  worked, 
by  the  London  County  Council,  whose  policy  has 
been  consistently  directed  to  the  exclusion  of  private 
promoters  from  within  the  County  of  London; 
such  tramways  within  their  jurisdiction  as  do 
not  already  belong  to  them  will  be  acquired, 
under  existing  statutory  powers,  in  the  course 
of  a  few  years.  In  the  districts  of  'Greater 
London '  f  lying  outside  the  Administrative  County 
of  London,  a  different  policy  in  general  prevails: 
the  tramways  are  largely  worked  by  private  com- 
panies. This  difference  of  policy  would  not  neces- 
sarily entail  inconvenience,  if  the  systems  on  the 
outside  were  worked  in  harmony  with  those  inside, 
so  that  cars  could  run-  continuously  across  the  fron- 
tier. Unfortunately,  that  is  not  the  case.  The 
systems,  where  they  meet  at  the  frontier,  are  not 
always  physically  connected,  and  in  no  case  is  there 
through  running.  Accordingly,  every  through  passen- 
ger is  obliged  to  change  cars  (and  pay  a  new  fare). 

*  Area,  117  square  miles. 

f  Area  of  Greater  London,  which  includes  the  County  of  London, 
is  693  square  miles. 


GREATER  LONDON  159 

"Inside  the  County  of  London  itself,  there  are  also 
very  serious  defects.  Three  systems  of  tramway 
are  included  in  this  area:  the  northern  and  eastern 
system,  wholly  north  of  the  Thames;  the  western 
system,  also  wholly  north  of  the  Thames;  and  the 
southern  system,  wholly  south  of  the  Thames.  All 
these  three  systems  are  separated  from  each  other 
by  long  intervals,  without  any  connection;  while 
great  districts  in  the  centre  of  London,  including  the 
city,  the  'West  End,'  and  the  chief  places  of  public 
resort,  are  entirely  unprovided  with  tramway  service. 
The  different  lines  approach  those  districts  and  then 
break  off  abruptly  in  the  middle  of  the  street.  As  a 
result,  all  the  cars  are  obliged  to  discharge  their 
passengers  at  dead-end  terminals.  At  the  six  prin- 
cipal terminals,  nearly  a  quarter  of  a  million  pas- 
sengers alight  from,  or  join,  the  cars  every  day  in  the 
streets.  Apart  from  the  great  inconvenience  caused 
to  all  or  most  of  the  passengers,  the  result  is  a  great 
congestion,  both  of  tramcars  and  of  ordinary  vehicu- 
lar and  passenger  traffic,  at  these  terminal  points; 
and  the  same  congestion,  though  in  a  less  degree, 
occurs  at  the  other  terminals  in  London. 

"The  Advisory  Board  of  Engineers  estimate  that 
the  carrying  power  of  a  tramway  system  may  be  di- 
minished by  about  one-half  by  reason  of  the  cross- 
shunting  necessary  at  dead-end  terminals.  In  the 
absence  of  delay  from  this  cause,  150  cars,  or  upward, 
per  hour  might  be  run  on  a  single  track,  even  in  busy 


160    MUNICIPAL   OWNERSHIP   IN  GREAT   BRITAIN 

thoroughfares;  but  at  Westminster,  for  example, 
where  a  number  of  cars  from  different  lines  converge 
at  the  Lambeth  end  of  Westminster  Bridge,  the 
necessity  for  cross-shunting  creates  so  great  a  delay 
that  all  the  lines  taken  together  cannot  run  more  than 
72  cars  per  hour  in  one  direction,  and  that  only  under 
pressure. 

"It  will  be  seen  that,  from  every  point  of  view, 
tramway  accommodation  is  glaringly  defective.  In 
a  great  area,  there  is  no  tramway  service  at  all. 
Where  there  is  such  a  service,  travellers  do  not 
obtain  the  full  advantage  which  it  ought  to  provide, 
in  cheapness,  expedition,  and  convenience.  An  '  end- 
on  '  break  in  the  course  of  a  journey  probably  causes 
additional  expense  (for  two  independent  fares  usually 
cost  more  than  a  through  fare),  whilst  the  conse- 
quent delay  and  discomfort,  especially  in  bad  weather, 
and  the  uncertainty  of  trans-shipment,  are  great 
drawbacks.  Where  the  line  abruptly  terminates 
in  the  middle  of  crowded  streets,  even  greater  dis- 
comfort is  caused,  together  with  serious  diminution 
of  efficiency  in  the  entire  tramway  service,  and  an 
intolerable  congestion  in  the  streets." 

By  way  of  comment  upon  the  Royal  Commission's 
statement  that  there  is  "no  case  of  through  running" 
between  "extra  London"  and  the  administrative 
County  of  London,  it  may  be  added  that  in  1904  the 
combined  municipalities  of  Great  Britain,  under  the 
leadership  of  Manchester  and  Glasgow,  defeated  the 


GREATER   LONDON  161 

efforts  of  the  combined  tramway  companies  to  get 
Parliament  to  establish  the  principle  of  granting 
"compulsory  running  powers"  in  case  two  adjoin- 
ing tramway  systems  are  unable  amicably  to  agree 
upon  running  powers.  The  Tyneside  Tramways 
and  Tramroads  Co.  Bill,  establishing  this  principle 
of  compulsory  powers,  was  •  passed  unanimously 
by  the  Committee  of  the  House  of  Lords,  also  unani- 
mously by  the  Committee  of  the  House  of  Commons ; 
in  the  House  of  Commons  it  was  supported  by  Mr. 
Bonar  Law,  Parliamentary  Secretary  to  the  Board 
of  Trade,  but  it  was  rejected  in  the  House  of  Com- 
mons by  178  votes  against  142.* 

In  1 90 1,  the  city  of  London  and  the  twenty- 
eight  Metropolitan  Boroughs,  whose  area  is  117 
square  miles,  had  4,557,000  inhabitants,  of  whom 
Overcrowding  726,000,  or  16  per  cent,  lived  in  the 
Perpetuated  overcrowded  condition  of  more  than 

two  people  in  one  room.  The  six  Metropolitan 
Boroughs  of  Bethnal  Green,  Finsbury,  Holborn, 
Shoreditch,  Stepney,  and  St.  Pancras  had  943,000 
inhabitants,  of  whom  280,000,  or  30  per  cent,  lived 
in  an  overcrowded  condition.  In  eight  Boroughs 
the  overcrowded  population  was  less  than  10  per 
cent  of  the  total ;  in  nine  Boroughs  it  ranged  from 
10  to  15  per  cent;  in  three  Boroughs  it  ranged  from 
16  to  20  per  cent;  in  three  it  ranged  from  21  per 

*  The  Municipal  Journal,  April  15  and  22,  June  10,  17,  and  24, 
July  8  and  29,  August  5,  1904,  and  February  10,  1905. 


162    MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

cent  to  24  per  cent ;  and  in  five  it  ranged  from  25  per 
cent  to  35  per  cent  * 

The  Report  0)  the  Royal  Commission  on  the  Means 
of  Locomotion  and  Transport  in  London  says  that 
the  price  of  land  "a  few  miles  out  is  still  sufficiently 
low"  to  admit  of  the  building  of  houses  for  the  work- 
ing classes,  and  the  renting  of  such  houses  "at  rents 
which  the  tenants  can  afford  to  pay  ...  if  means 
are  provided  to  enable  workmen  to  get  in  and  out  of 
London  quickly  and  cheaply."  It  adds  "  that  a  large 
proportion  of  workers  in  the  overcrowded  parts  of 
London  do  not  need  to  live  near  their  work,"  and 
"that  where  facilities  for  locomotion  have  been  af- 
forded, the  population  does,  in  fact,  take  advantage 
of  them  to  live  outside  London."  By  way  of  illus- 
tration, the  Royal  Commission  cites  the  growth  of 
Walthamstow  from  21,700  in  1881  to  46,300  in  1891, 
to  95,100  in  1901,  and  to  110,000  in  1904.  In  1901, 
15,000  out  of  18,600  houses  in  Walthamstow  rented 
at  less  than  $80  a  year,  indicating  that  Waltham- 
stow has  been  built  up  entirely  by  the  movement  of 
the  less  well-to-do  classes  from  the  congested  dis- 
tricts, in  consequence  of  the  Great  Eastern  Rail- 
way running  frequent  cheap  "workmen's"  trains. 
The  local  authorities  of  Walthamstow  themselves 
refused  to  aid  the  movement  or  to  permit  private 
enterprise  to  aid  it  by  building  street  railways  in 

*  Census  of  England  and  Wales,  1901.  General  Report,  with  Appen- 
dices, p.  294. 


GREATER   LONDON  163 

Walthamstow.  Under  the  leadership  of  the  politi- 
cians, the  people  year  after  year  debated  (i)  whether 
Walthamstow  should  have  tramways  at  all,  and  (2) 
if  so,  whether  it  should  have  municipal  tramways 
or  company  tramways.  Finally,  in  February,  1903, 
the  city  obtained  a  charter  for  9.5  miles  of  tramway; 
and  in  April,  1904,  it  began  construction. 

Edmonton,  which  adjoins  Walthamstow  on  the 
northwest,  grew  from  23,500  in  1881  to  36,400  in 
1 89 1,  and  to  61,900  in  1901,  through  the  provision 
of  cheap  workmen's  trains  by  the  Great  Eastern 
Railway  Co.  Not  until  1904  did  the  County 
of  Middlesex  supply  Edmonton  with  an  electric 
tramway.  At  the  close  of  1904,  Edmonton,  Totten- 
ham, Harnsey,  and  adjoining  towns  had  one  mile  of 
street  railway  track  for  each  7500  people. 

Leyton,  which  adjoins  Walthamstow  on  the  south- 
east and  has  recently  had  a  rapid  growth  to  120,000 
inhabitants,  in  1904  had  less  than  seven  route  miles 
of  electric  street  railway,  supplied  by  the  Leyton 
Urban  District  Council.  The  spirit  of  the  Leyton 
authorities  is  illustrated  in  the  fact  that,  in  1884, 
Leyton  compelled  the  Lea  Bridge,  Leyton,  and 
Walthamstow  Tramway  Co.  to  defray  the  main 
cost  of  widening  a  part  of  the  road  to  be  trav- 
ersed by  the  tramway  company,  "an  improvement 
desired  and  debated  by  the  Local  Board  of  Works 
long  before  the  tramway  had  been  proposed."  In 
that  same  year  "some  extensions  in  East  London, 


164    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

proposed  in  the  company's  deposited  Bill,  were  aban- 
doned owing  to  the  terms  insisted  on  by  the  local 
authorities."  * 

The  Royal  Commission  says:  "Increased  modern 
means  of  locomotion  and  transport  are  much  needed, 
both  to  facilitate  movement  within  the  central  area 
(the  administrative  County  of  London),  and  to 
facilitate  access  to  and  from  and  within  the  suburbs 
for  those  who  work  in  London  and  live  outside. 
Electric  tramways  and  railways  are  necessary  for 
both  these  purposes ;  tramways  mostly  for  the  former, 
and  railways  mostly  for  the  latter,  with  intercommu- 
nication between  the  two." 

As  to  the  building  of  additional  tramways  in  the 
Administrative  County  of  London,  the  report  says: 
"The  opinion  is  widely  held  that  the  streets  of  Lon- 
don are  too  narrow  for  tramways  on  a  large  scale. 
No  doubt  many  streets  are  too  narrow.  The  real 
question  is  whether  this  disadvantage  is  so  wide- 
spread as  to  necessitate  the  postponement  of  a  great 
tramway  extension  until  costly  operations  of  (street) 
widening  have  been  carried  through.  Certainly 
some  street  improvement  is  necessary  in  places,  from 
any  point  of  view,  .  .  .  but  we  are  persuaded  that  a 
great  deal  can  be  done  in  the  way  of  tramway  exten- 
sion, without  any  great  expense  of  this  kind.  .  .  . 
We  recommend:  A  large  extension  of  tramways  in 
London  and  the  suburbs;   that  immediate  attention 

*  Clifford's  History  of  Private  Bill  Legislation,  Vol.  I,  p.  191. 


GREATER   LONDON  165 

be  given  to  providing  through  communication 
between  the  different  tramway  systems  within  the 
Administrative  County  of  London;  across  the 
Thames  by  the  Westminster  and  Blackfriars  bridges ; 
and  that  provision  be  made  for  through  running  inside 
and  outside  the  Administrative  County  of  London." 
The  Commission  also  draws  attention  to  the  fact  that 
a  large  part  of  the  present  congestion  of  the  streets 
is  due  to  the  absence  of  street  railways.  It  cites 
the  estimate  submitted  by  Sir  Alexander  Bruce, 
Assistant  Commissioner  of  Metropolitan  Police,  that 
60  per  cent  of  the  vehicular  traffic  of  London  is 
made  up  of  omnibuses  *  and  hackney  carriages.  It 
adds  that  in  Liverpool  the  electric  tramways  have 
driven  the  omnibuses  off  the  streets;  and  that  an 
adequate  system  of  tramways  would  achieve  the  same 
result  in  London. 

Similar  testimony  was  given  in  March,  1904,  by 
Mr.  E.  J.  Harper,  statistical  officer  of  the  London 
County  Council,!  who  said:  "Much  of  the  conges- 
tion in  the  streets  is  due  to  the  places  at  which  pas- 
sengers are  set  down  by  the  various  carrying  compa- 
nies. Omnibus  routes  generally  run  right  through 
the  central  area  to  a  terminus  at  its  far  side.  Traffic 
is  attracted  by  the  facility  thus  given  for  passengers 
to  alight  at  any  part  of  the  central  area  most  con- 
venient to  them.     But,  generally  speaking,  railway 

*  Greater  London,  1902:  Omnibus  traffic,  279,467,000;  Tramway 
traffic,  350,180,000. 

t  Journal  of  the  Royal  Statistical  Society,  June,  1904. 


166    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

and  tramway  termini  are  situated  on  the  edge  of  the 
central  area  nearest  to  the  districts  which  they  serve. 
The  result  is  that  railway  and  tramway  passengers, 
for  the  most  part,  are  not  carried  as  near  to  their 
ultimate  destinations  as  they  might  wish ;  and  conse- 
quently the  streets  are  flooded  with  pedestrians  in 
the  neighborhood  of  these  termini  in  the  morning 
hours.  They  either  make  their  way  on  foot  to  their 
destinations,  or  take  omnibuses  or  cabs  for  that 
purpose,  thus  adding  to  the  causes  for  vehicular 
congestion."  Mr.  Harper  added  that  the  number 
of  omnibuses  passing  along  the  Strand,  at  Wel- 
lington Street,  ranged  from  328  per  hour  to  369; 
along  Holborn,  at  Southampton  Row,  from  239  per 
hour  to  284 ;  along  Piccadilly,  at  Wakingham  Harse, 
from  366  per  hour  to  400.  In  these  cases  the  omni- 
buses constituted  from  29.9  per  cent  to  36.5  per  cent 
of  the  total  number  of  vehicles. 

On  the  question  of  increased  transportation  fa- 
cilities from  the  Administrative  County  of  London 
to  the  outlying  regions,  the  Royal  Commission  said 
that  the  steam  railroad  companies  were  "not  gener- 
ally prepared  to  construct  lines  leading  to  unoccupied 
districts  in  expectation  of  being  'recouped'  by  the 
growth  of  population,"  and  that,  therefore,  the 
decentralization  of  the  population  would  have  to  be 
effected  by  means  of  electric  railways  running  in 
subways  or  in  "tubes."  It  added,  however,  that 
"a  marked  feature  in  connection  with  underground 


GREATER   LONDON  167 

railways  of  all  classes  has  been  the  difficulty  experi- 
enced in  raising  the  necessary  capital.  In  the  first 
instance,  this  was  no  doubt  due  to  the  unusual 
nature  of  the  enterprise,  but  its  continuance  to  the 
present  time  is  due  to  the  fact  that  the  (under- 
ground) railways  that  are  at  present  in  operation 
have  not  given  very  satisfactory  results  from  a 
pecuniary  point  of  view.  .  .  .  We  have  said  else- 
where in  our  report  that,  in  our  opinion,  if  undue 
burdens  are  not  thrown  upon  railway  undertakings, 
it  will  not  be  necessary  to  give  direct  assistance  to 
new  railways  from  public  sources.  But  so  much 
importance  do  we  attach  to  the  construction  of  rail- 
ways to  new  residential  districts  that,  if  private 
enterprise  will  not  make  such  railways,  we  have  no 
hesitation  in  recommending  that  the  municipal  au- 
thorities should  be  empowered  to  assist ;  this  course 
was  recommended  by  the  Joint  Select  Committee  of 
1 90 1,*  as  already  explained  in  paragraph  53  of  this 
report.  The  form  in  which  assistance  would  be 
given  might  vary  with  the  circumstances  of  the  case. 
The  municipal  credit  might  be  used  to  raise  the  capi- 
tal cheaply,  or  the  municipal  authorities  might  take 
shares  or  find  a  portion  of  the  capital  at  a  low  rate  of 
interest,  or  arrange  for  a  total  or  partial  remission 
of  local  rates  (taxes) ;  in  some  cases  they  could 
grant   space   for   stations  free   of  charge.  ...     If 

*  Report  o]  the  Joint  Committee  of  1901   on  London   Underground 
Railways. 


168      MUNICIPAL   OWNERSHIP  IN  GREAT  BRITAIN 

the  London  County  Council  gave  assistance  in  the 
construction  of  an  underground  railway,  it  might 
be  desirable  that  it  should  acquire  a  tract  of  land 
for  building  purposes  at  the  outer  extremity  of  the 
line,  prepare  a  building  plan  for  it,  and  let  it  on 
lease  for  building  purposes.  A  portion  of  the  ex- 
penditure might  be  recovered  in  this  way." 

Coming  at  last  to  the  question  of  the  fares  to  be 
charged  upon  the  suggested  underground  railways, 
the  Royal  Commission  said:  "A  uniform  fare  at  as 
low  a  figure  as  four  cents  per  passenger  journey, 
applicable  over  a  system  as  large  as  the  Metropolitan 
District  Railway  system  (route  mileage,  26  miles), 
would  be  a  great  public  advantage.  With  the  speeds 
at  which  electric  trams  will  be  run,  the  disadvan- 
tage of  distance  is  reduced  to  a  minimum,  and,  if  a 
uniform  fare  per  journey  were  charged,  it  would  not 
only  tend  to  spread  the  population  over  a  wide  area, 
but  would  also  encourage  people  to  go  well  into 
the  country,  where  land  is  cheaper  and  the  sur- 
roundings are  healthier.  We  think  that  every  en- 
couragement should  be  given  to  the  adoption  of  a 
uniform  fare  of  four  cents  per  journey,  up  to  the 
limit  which  would  reasonably  be  covered  for  that 
fare,  and  for  distances  beyond  that  limit,  uniform 
fares,  possibly  on  a  zone  system  basis."  In  other 
words,  the  Royal  Commission  rejected  the  principle 
of  graded  fares. 

In  strong  contrast  to  the  position  taken  by    the 


GREATER   LONDON  169 

Royal  Commission  —  namely,  that  in  the  matter  of 
underground  electric  railways  public  necessity  and 
Public  Necessity  convenience  demand  that  the  first  con- 
versus  Municipal  sideration  be  given  to  devising  means 
that  shall  induce  private  enterprise  to 
build  such  underground  railways  —  is  the  position 
taken  by  the  London  County  Council.  The  latter 
body  holds  that  the  needs  of  the  public  treasury 
take  precedence  »over  the  necessity  and  convenience 
of  the  public.  Mr.  Charles  Harrison,  Chairman  of 
the  Parliamentary  Committee  of  the  London  County 
Council,  appeared  before  the  Joint  Select  Com- 
mittee of  1892  on  the  Electric  and  Cable  Rail- 
ways to  present  the  demand  of  the  London 
County  Council  that  there  be  inserted  in  the  char- 
ters of  all  underground  railways,  clauses  authoriz- 
ing the  London  County  Council  to  purchase  at  the 
end  of  sixty  years  on  the  basis  of  structural  value. 
If  the  County  Council  should  fail  to  exercise  the 
right  of  purchase  at  the  expiration  of  sixty  years, 
it  was  to  have  the  right  of  purchase  at  the  end  of  each 
recurring  period  of  seven  years.  This  latter  pro- 
vision was  copied  from  the  Tramways  Act,  1870. 
Mr.  Harrison  said  the  County  Council  might  find 
that  sixty  years  had  not  been  sufficient  to  enable 
a  company  to  make  its  underground  railway  a  paying 
property;  and  in  that  case  the  County  Council 
would  desire  to  leave  the  property  on  the  hands  of  the 
company  until  such  time  as  it  had  become  a  paying 


170    MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

property.     The  County  Council  had  no  desire  to 
own  or  operate  a  non-paying  underground  railway. 

The  underground  electric  railways,  or  "tubes," 
are  built  at  a  level  of  50  to  80  feet  below  the  surface, 
following  air-lines,  not  the  streets,  and  the  en- 
trances and  exits  are  on  the  private  property  of 
the  companies.  Furthermore,  Mr.  Harrison  him- 
self admitted  that  the  rights  of  the  public  authority 
in  the  street  extended  only  to  the  right  of  user  for 
the  purposes  of  a  street,  and  that  that  right  did  not 
extend  50  to  70  feet  below  the  surface.  These  facts 
led  Mr.  Bolton,  a  member  of  the  Committee,  to  ask 
Mr.  Harrison,  "Upon  what  ground  of  principle  do 
you  justify  any  claim  for  compensation  either  in  the 
shape  of  the  right  of  purchase,  or  in  any  other  way, 
for  the  right  to  tunnel  asked  for  from  Parliament?" 
Mr.  Harrison  replied,  "We  base  it  on  the  broad 
ground  that  every  municipality  should  be  at  liberty 
to  acquire  all  that  which  is  necessary  for  the  munic- 
ipality, of  which  locomotion  is  one,  as  is  evidenced 
by  the  tramway  system;  and  that  if  it  is  advisable 
that  we  should  have  a  remunerative  undertaking 
for  the  tramway  system,  this  is  another  subterra- 
nean tramway  system,  and  would  be  subject  to  the 
same  rule."  Mr.  Bolton  continued,  "But  in  con- 
nection with  the  tramways,  the  tramway  company 
acquire  the  exclusive  right  of  a  portion  of  the  street. " 
Mr.  Harrison  replied,  "No,  they  do  not,  indeed." 
Mr.    Bolton,    "Therefore   they   have   the   exclusive 


GREATER   LONDON  -  171 

right  to  a  particular  user  of  the  street."  Mr. 
Harrison,  "I  do  not  at  all  agree  with  that;  they 
have  no  more  user  than  I  have.  I  can  drive  with 
my  carriage  over  the  rails  without  (using)  the 
flange  wheel."  Mr.  Bolton,  "Was  it  not  in  consider- 
ation of  the  rights  that  were  given  them  over  the 
public  streets  that  Parliament  thought  it  desirable 
to  give  the  local  authority  the  right  to  resume  at 
particular  periods  the  full  control  of  the  streets?" 
Mr.  Harrison,  "I  do  not  think  so;  of  course  it  is  a 
matter  of  opinion,  but  I  should  have  thought  that 
the  ground  upon  which  the  right  of  purchase  of  the 
tramways  was  based,  was  not  upon  that  ground  at 
all,  but  that  locomotion  was  a  matter,  as  much  as 
light  and  water,  which  in  a  municipal  area  ought 
to  be  carried  on  by,  and  be  in  the  hands  of  a  mu- 
nicipal authority."  *  Thus  we  find  the  London 
County  Council,  in  1892,  taking  toward  the  new 
industry,  "tube"  railways,  precisely  the  attitude 
which  the  British  municipalities  had  taken  in  1870 
toward  the  new  industry  of  horse  street  railways.  In 
both  cases  the  attitude  was,  without  qualification, 
the  simple  one  of  proposing  to  use  the  public  author- 
ity's power  to  regulate  the  use  of  the  streets  for  the 
purpose  of  putting  money  into  the  public  treasury. 
There  was  no  desire  to  promote  the  public  conven- 
ience by  aiding  and  facilitating  the  establishment  of 
a  new  means  of  locomotion. 

*  Report  from  Joint  Select  Committee  of  House  of  Lords  and  House 
of  Commons  on  the  Electric  and  Cable  Railways  {Metropolis),  1892 ;  q.  416, 
629  to  665. 


CHAPTER  XI 

THE  MUNICIPAL  PURCHASES   OF  COMPANY  GAS 
PLANTS 

In  order  to  understand  the  conditions  under 
which  Parliament  enacted  the  disastrous  Electric 
Lighting  Act,  1882,  which  Act  will  be  discussed  in 
the  next  chapter,  it  is  necessary  to  describe  briefly 
the  purchases  of  company  gas  plants  made  by  the 
British  municipalities  in  1869  to  1878. 

With  the  rapid  growth  of  the  British  cities  which 
set  in  with  the  beginning  of  the  second  half  of  the 
last  century,  the  gas  lighting  industry  passed  from 
the  speculative  and  non-paying  state  to  the  state  of 
an  established  industry  attended  with  little  risk  and 
yielding  a  fair  profit.  Thereupon  the  British  cities 
and  towns,  which,  with  few  exceptions,  had  let  the 
industry  severely  alone  while  it  was  in  the  speculative 
state,*  began  to  hunger  and  thirst  after  the  profits 
to  be  made  in  it.  For  example,  in  1874,  Mr.  Jo- 
seph   Chamberlain,    Mayor   of    Birmingham,    used 

*  The  Journal  of  Gas  Lighting,  Water  Supply,  and  Sanitary  Im- 
provement, July  9,  1878.  Manchester  is  the  only  instance  of  a  local 
authority  initiating  a  gas  plant. 

Manchester  established  a  public  gas  plant  in  1843.  The  first  charter 
to  a  gas  light  company  was  granted  in  18 10. 

172 


MUNICIPAL   PURCHASES   OF  GAS   PLANTS      173 

these  words  before  a  Select  Committee  of  the  House 
of  Commons:  "It  is  with  the  object  of  diminishing 
the  direct  taxation  of  Birmingham  that  we  are  pro- 
moting this  Bill"  (for  the  purchase  of  the  gas  plant). 
In  the  Birmingham  Town  Council,  Mr.  Chamber- 
lain expressed  the  hope  that  the  city  would  make  a 
profit  of  $125,000  in  the  first  year  after  the  purchase 
of  the  gas  plant,  and  larger  profits  in  subsequent 
years.*  He  added:  "When  the  purchase  of  the 
water  works  comes  before  you,  it  will  be  a  question 
concerning  the  health  of  the  town;  the  acquisition 
of  the  gas  works  concerns  the  profits  of  the  town 
and  its  financial  resources.  .  .  .  Both  are  matters 
of  absolute  public  necessity."  f 

Again,  the  following  article  appeared  in  the 
Hereford  Journal  in  June,  1877.  "Happy  Hereford  ! 
—  We  Herfordians  must  congratulate  ourselves  on 
our  latest  bereavement.  The  city  rate  (tax)  has 
expired.  It  is  dead,  past,  and  gone,  and  will  never 
come  to  life  again.  To  be  still  more  explicit,  let  us 
put  it  in  this  way  —  the  citizens  of  Hereford  will 
never  have  another  city  rate  (tax)  to  pay.  They 
have  paid  the  very  last  copper  that  will  be  asked  of 
them.  Henceforth  the  water  works,  the  gas  works, 
and  the  markets  will  provide  all  the  necessary  funds 
to  meet  the  expenditure  chargeable  on  the  city  rate  — 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900; 
Mr.  E.  O.  Smith;  Town  Clerk  of  Birmingham  since  1881,  q.  1894. 

t  N.  M.  Morris :  Joseph  Chamberlain,  The  Man  and  the  Statesman, 
p.  112. 


174     MUNICIPAL  OWNERSHIP  IN   GREAT  BRITAIN 

an  expenditure  which,  before  now,  has  had  to  be 
met  by  a  rate  of  3  shillings  and  6  pence  in  the 
pound."  *  In  1904  Hereford  was  a  city  of  22,000 
inhabitants;  it  had  no  street  railways,  and  it  had 
obtained  the  electric  light  as  late  as  December,  1899. 
In  the  period  from  1844  to  1867,  the  cities  bought  out 
13  gas  companies.  In  the  ten  years  1869  to  1878, 
they  bought  out  68  companies,  purchasing  respec- 
tively 10  plants  and  17  plants  in  the  two  years  1877 
and  1878.  In  1879,  they  bought  only  2  plants;  and 
in  the  thirteen  years  from  1880  to  1892,  they  bought 
only  15  plants.  In  1892  the  cities  resumed  the 
policy  of  acquiring  gas  plants,  purchasing  67  plants 
in  the  eleven  years  from  1893  to  1903.  At  the  close 
of  1903,  280  municipalities  in  the  United  Kingdom 
owned  gas  plants.  Of  that  number,  169,  or  60  per 
cent,  had  purchased  their  plants  fully  established  on  a 
paying  basis  and  equipped  with  trained  staffs,  and 
only  40  per  cent  had  incurred  the  trouble  and  risk 
incidental  to  the  development  of  a  paying  business 
and  the  organization  of  a  trained  staff,  f 

The  suspension  of  purchases  by  the  municipali- 
ties in  the  period  from  1879  to  1892  was  due  to  the 
fear  of  the  electric  light  as  a  competitor  of  the  gas 
light.  In  the  earlier  years  of  that  period  the  "  scare  " 
was  serious,  the  shares  of  some  gas  companies  de- 
clining as  much  as  30  per  cent.     In  November, 

*  The  Journal  of  Gas  Lighting,  Water  Supply,  and  Sanitary  Improve- 
ment, July  3,  1877. 

t  "The  Gas  World  "  Year  Book,  1904. 


MUNICIPAL  PURCHASES  OF  GAS  PLANTS      175 

1878,  the  citizens  of  Hereford  became  so  alarmed 
that  they  held  a  public  meeting  and  protested  against 
the  city  proceeding  with  the  erection  of  the  new  gas 
works  for  the  next  three  months.* 

Nominally  the  sales  of  plant  made  by  the  companies 
were  voluntary,  but  as  a  matter  of  fact  they  were 
not  infrequently  compulsory.  There  are  two  kinds 
Saks  of  Plants  by  of  gas  companies,  statutory  and  non- 
Companies  usu-  statutory.  The  former  are  author- 
aiiy  compulsory  ized  by  Special  Acts ;  the  latter  have 
no  parliamentary  authority,  but  operate  "  under  the 
freedom  of  trade  that  exists  at  common  law  with 
regard  to  the  supply  of  gas  as  with  regard  to  the 
supply  of  other  things."  f  As  to  statutory  gas  com- 
panies, it  is  the  general  policy  of  Parliament  to  re- 
fuse compulsory  sale.  J  But  it  is  possible  for  the 
local  authorities  to  worry  companies  into  selling  out. 
Before  a  Select  Committee  of  the  House  of  Lords,  in 
1886,  Sir  F.  J.  Bramwell  stated  that  municipalities 
had  all  kinds  of  ways  of  forcing  companies  to  sell, 
by  opposing  the  companies'  applications  before 
Parliament  for  permission  to  increase  their  capital 
in  order  to  expand  their  plants,  to  supply  gas-motors, 
and  to  do  many  other  things  dictated  by  business 

*  The  Journal  of  Gas  Lighting,  Water  Supply,  and  Sanitary  Im- 
provements, July  17  and  December  25,  1877;  October  29  and  November 
12,  1878. 

f  "The  Gas  World"  Year  Book,  1904:  "The  Law  of  Gas  Supply," 
by  J.  Duncan,  of  the  Middle  Temple,  Barrister-at-Law. 

%  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900; 
Sir  Courtenay  Boyle,  Permanent  Secretary  to  Board  of  Trade,  p.  352. 


176    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

enterprise.  Sir  F.  J.  Bramwell,  by  virtue  of  his 
position  as  one  of  the  most  eminent  mechanical  en- 
gineers of  Great  Britain,  had  had  very  large  experi- 
ence as  arbitrator  and  as  expert  witness  in  cases  of 
the  sale  of  gas  works  and  water  works  to  local  au- 
thorities. He  was,  moreover,  a  man  ready  to  make 
pecuniary  sacrifices  for  the  sake  of  his  convictions, 
as  he  had  never  consented  to  appear  as  a  witness 
for  a  local  authority  asking  Parliament  for  power 
of  compulsory  purchase.* 

Before  the  same  committee,  Mr.  S.  G.  Johnson, 
Town  Clerk  of  Nottingham,  admitted  that  the  city 
of  Nottingham  had  finally  worried  the  gas  company 
into  selling  out,  by  opposing  every  application  the 
company  made  for  permission  to  extend  its  mains 
into  the  outlying  suburbs.  The  Town  Clerk  said  the 
company's  standard  dividend,  under  the  sliding  scale 
of  prices,  had  been  5.5  per  cent,  and  "whenever  they 
could  pay  more  than  5.5  per  cent  dividend,  rather  than 
reduce  the  price  of  gas  in  the  city  they  built  mains 
to  places  outside  the  city  for  which  they  could  not 
get  more  than  1.5  per  cent  profit,  so  they  brought 
the  dividend  down  to  5.5 'per  cent."  At  the  time  of 
the  sale  to  the  city  the  company  was  supplying  gas 
to  an  area  of  over  100  square  miles  outside  of  Not- 
tingham. In  1898  the  Town  Clerk  of  Notting- 
ham testified  that  the  city  was  making  a  "large 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amend- 
ment Bills,  1886;  Sir  F.  J.  Bramwell,  q.  448,  404,  405,  and  580. 


MUNICIPAL  PURCHASES   OF   GAS  PLANTS      177 

profit"  from  the  sale  of  gas,  but  that  it  had  built  no 
further  mains  into  the  outlying  districts.* 

In  1899  the  Bristol  Gas  Co.  asked  Parliament  for 
enlarged  powers,  in  order  that  it  might  lay  pipes  for 
the  purpose  of  conveying  oil  and  tar,  by-products 
of  the  gas  industry;  and  also  hire  out  dynamos  to 
be  operated  by  gas-engines.  Upon  the  opposition 
of  the  city  of  Bristol,  Parliament  denied  the  re- 
quest. Again,  the  company  was  bound  by  its  char- 
ter not  to  charge  the  city  a  higher  price  for  gas  for 
street  lamps  than  the  lowest  rate  paid  for  the  time 
being  by  any  consumer.  When  this  contract  was 
made  gas  was  used  only  for  lighting.  The  company 
now  asked  Parliament  for  permission  to  make 
special  rates  on  gas  used  for  purposes  other  than 
lighting,  without  being  obliged  to  extend  those 
rates  to  gas  for  street  lamps.  Upon  the  request  of 
the  city,  Parliament  refused  the  desired  permission. 
At  this  time  the  city  was  furnishing  electric  current 
for  power  at  3  cents  per  unit,  while  it  was  charging 
for  current  for  lighting  from  4.66  cents  to  10  cents 
per  unit.f 

The  non-statutory  gas  companies  are  not  restricted 
by  the  provisions  of  the  Gas  Works  Clauses  Acts, 
1897  and   1 87 1,  which  are  inserted  in  all  Private 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amend- 
ment Bills,  1886;  q.  1567  to  1590;  and  Report  of  Joint  Committee  on 
Electricity  Generating  Stations  and  Supply,   1898;    q.   1384,   1458,  and 

1459- 

t  The  Journal  oj  Gas  Lighting,  Water  Supply,  and  Sanitary  Improve- 
ments, March  28,  and  June  27,  1899;   and  April  17,  1900. 


178     MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

Acts,  and  compel  supply,  fix  the  standard  of  illumi- 
nating power,  pressure,  and  purity,  and  limit  the 
profit  to  be  divided  among  the  undertakers.  For 
that  reason  the  status  of  the  non-statutory  gas  com- 
pany is  adapted  to  small  towns  in  which  the  outlook 
for  gas  undertakings  is  not  promising,  and  capital- 
ists have  to  be  tempted  into  the  field  through  the 
removal  of  every  governmental  regulation  and  restric- 
tion. But  the  non-statutory  companies  are  liable 
to  be  wiped  out  through  Parliament  creating  in  their 
areas  statutory  companies,  which,  by  implication,  ob- 
tain a  monopoly  to  supply  gas  in  the  areas  for  which 
they  are  authorized.  The  towns  are  very  likely  to 
apply  to  Parliament  for  a  charter  as  soon  as  the 
statutory  companies  have  passed  through  the  years 
of  uncertainty  and  loss,  and  have  established  them- 
selves as  profitable  ventures.  Generally  speaking, 
Parliament  in  such  cases  will  give  the  charter  to  the 
company  and  not  to  the  local  authority,  if  the  local 
authority  cannot  prove  past  mismanagement  or  bad 
supply  of  gas  on  the  part  of  the  non-statutory  com- 
pany. "But  in  certain  cases,  where  very  strong 
local  feeling  exists,  (Parliamentary)  *  Committees 
have  brought  some  pressure  upon  the  company  to 
induce  them  to  agree  to  sell  upon  very  favorable 
terms."  Then  again,  the  companies  often  are  dis- 
inclined to  incur  the  heavy  expense  of  proving  before 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900; 
p.  352,  Sir  Courtenay  Boyle,  Permanent  Secretary  to  Board  of  Trade. 


MUNICIPAL   PURCHASES   OF   GAS   PLANTS      179 

a  Parliamentary  Committee  that  their  past  manage- 
ment has  been  satisfactory;  they  prefer  to  let  the 
application  of  the  local  authority  go  unopposed,  in 
consideration  of  the  purchase  of  their  plant  by  the 
local  authority. 

Before  the  Joint  Select  Committee  on  Munic- 
ipal Trading,  in  1900,  Mr.  E.  C.  Leigh,  since  1883 
Counsel  to  the  Speaker  and  Chairman  of  Com- 
mittees of  the  House  of  Commons,  testified  as  fol- 
lows upon  the  subject  of  the  purchases  of  gas  plants 
by  the  local  authorities.  "What  my  personal 
opinion  is  may  not  be  worth  much;  but  perhaps 
you  will  stop  me  if  you  think  I  am  going  further 
than  I  ought.  At  the  same  time,  I  rather  dep- 
recate the  practice  of  municipalities  acquiring  com- 
pulsorily  both  water  and  gas  companies  against  their 
will  and  without  their  consent,  and  this  practice 
has  increased  to  an  enormous  extent  during  the 
last  few  years.  I  can  remember  when  I  was  first 
at  the  Parliamentary  Bar,  and  it  goes  back,  I  am 
sorry  to  say,  to  1872,  the  only  case  of  compulsory 
acquisition  had  been  the  Stockton  and  Middles- 
borough  case.  Then  Birmingham  came  for  gas 
and  water  (in  1874).  I  think,  if  I  remember 
rightly,  I  was  Junior  Counsel  in  both  those  (Bir- 
mingham) Bills.  .  .  .  Eventually  both  the  water 
company  and  the  gas  company  were  acquired 
by  agreement;  I  forget  the  number  of  years'  pur- 
chase, but  upon  very  liberal  terms.    Then  I  cannot 


180    MUNICIPAL  OWNERSHIP   IN   GREAT    BRITAIN 

remember  a  case  for  a  great  many  years  where  a 
single  gas  company  or  water  company  have  been 
acquired  when  they  objected  to  it,  and  when  the 
Committee  found  that  the  identical  gas  or  water 
company  had  been  doing  their  duty  and  satisfying 
the  needs  of  the  town  or  district.  Then  some  few 
years  ago  that  seems  to  have  altered.  There  is 
no  question  about  it  that  in  the  last  few  years  com- 
pulsory purchase  has  been  granted  in  several  cases, 
or  a  company  has  been  driven  to  find  that  they 
had  far  better  agree  to  be  bought  up  on  fairly  lib- 
eral terms  than  to  fight  the  thing  in  Parliament 
.  .  .  and  I  should  like  to  add  that  that  is  very 
often  the  case  with  small  municipalities  or  local 
boards.  The  larger  public  authorities,  I  am  bound 
to  say,  can  always  show  a  very  much  better  case 
(for  compulsory  purchase)  than  the  smaller  ones. 
I  think  Mr.  Gray  (Counsel  to  the  Chairman  of 
Committees  in  the  House  of  Lords)  made  the 
same  remark  in  his  evidence.  It  has  been  too 
much  a  habit  of  late  years  for  small  bodies,  who 
have  no  right  to  come  for  these  powers,  to  buy  up 
water  and  gas,  to  come  and  get  powers  from  Par- 
liament. We  have  had  them  in  the  case  of  unop- 
posed Bills.  As  a  matter  of  fact,  the  result  is  this: 
Taking  gas,  local  authorities,  to  the  number  of 
250,  already  hold  the  supply  of  gas  in  Great 
Britain,  and  in  practically  the  whole  of  those 
cases    the    gas    undertaking    has    been    originally 


MUNICIPAL  PURCHASES   OF   GAS  PLANTS      181 

founded  by  a  company,  and  subsequently  pur- 
chased by  the  municipality.  In  fact,  one  may 
say  broadly,  municipalities  never  invented  or  ini- 
tiated anything,  either  with  regard  to  tramways 
or  gas  or  electric  lighting,  and  yet  when  a  company 
has  become  flourishing,  they  have  been  rather 
forced  in  a  corner  to  sell  their  undertaking.  .  .  . 
Then  I  think  I  may  go  a  little  further  and  say  I 
know  of  no  case  in  which  a  municipal  body  has 
sought  to  acquire  a  gas  undertaking  which  was 
not  in  a  flourishing  condition.  They  have  not 
come  in  for  the  purpose  of  helping  the  (consumers 
in)  municipality  when  a  gas  undertaking  is  being 
badly  carried  on,  but  they  have  pounced  upon  gas 
companies  when  they  are  paying  their  full  divi- 
dend. .  .  .  Then,  I  may  add,  in  a  great  many 
cases  efforts  have  been  made  to  acquire  gas  under- 
takings which,  having  struggled  through  a  long 
period  of  unprofitable  working,  are  now  on  the 
eve  of  success.  I  know  of  no  less  than  four  cases 
in  the  last  two  Sessions  of  Parliament,  three  of 
which  were  thrown  out  by  Parliament,  and  the 
other  was  passed  where,  just  as  they  were  turning 
the  corner,  the  (municipal)  corporation  had  pounced 
upon  them.  ...  In  my  experience,  the  local  au- 
thorities are  rather  in  the  habit  of  catching  hold 
of  flourishing  companies;  I  do  not  see  that  they 
try  to  get  the  companies  who  are  in  deep  water 
out   of   their  deep  water  into  shallow  water.  .  .  . 


182    MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

I  am  talking  of  the  habit  that  has  grown  up  in  late 
years  —  I  am  not  talking  of  great  towns  like  Leeds 
and  Birmingham,  but  very  small  local  Boards  which 
come  for  the  compulsory  purchase  of  gas  companies 
which  are  just  beginning  to  feel  their  way."  * 

The  extent  to  which  the  local  authorities  have 
confined  themselves  to  the  purchase  of  the  more 
remunerative  gas  undertakings  is  indicated  by  the 
Municipalities  following  testimony  from  Sir  Court- 
profit from initia-  enay    Boyle,     Permanent     Secretary 

Hon  of  Companies   tQ    ^    Board     of    Trade    frQm    ^ 

to  1 90 1.  "  The  average  receipts  per  thousand 
cubic  feet  of  gas  sold  (in  1898-99)  was  in  the 
case  of  local  authorities,  72.8  cents,  as  compared 
with  84.4  cents  received  by  companies.  This 
would  indicate  that  generally  the  price  charged  to 
consumers  was  higher  in  the  case  of  companies 
than  local  authorities,  but  in  making  such  a  com- 
parison it  should  be  borne  in  mind  that  the  dis- 
tricts served  by  local  authorities  are  usually  the 
most  populous,  and  therefore,  the  most  remuner- 
ative. On  the  whole,  the  returns  do  not  suggest 
that  in  like  circumstances  there  is  any  great  balance 
of  advantage  to  the  consumer,  as  regards  the  price 
charged,  in  being  supplied  by  a  local  authority 
instead  of  by  a  company."  f 

The    price    paid    by   the    municipalities   for   gas 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900; 
q.  619  to  623,  and  672  to  676. 
t  Ibid.,  1900;  p.  351. 


MUNICIPAL  PURCHASES   OF  GAS   PLANTS      183 

plants  always  is  "the  fair  market  value,"  which 
includes  an  allowance  for  future  growth  of  prof- 
its, if,  at  the  time  of  the  sale  there  is  promise  of 
such  future  growth.  "  The  Gas  World  "  Year 
Book,  1904,  gives  the  price  paid  for  each  $100  in- 
vested for  77  out  of  160  cases  of  sale  to  the  mu- 
nicipalities in  the  period  from  1844  to  1903.  In  52 
per  cent  of  the  cases,  this  price  ranged  from  200 
to  272,  and  in  35  per  cent  of  the  cases  it  ranged 
from  150  to  193.  The  premiums  paid  were  high 
absolutely,  but  they  were  relatively  reasonable,  and 
they  were  justified  by  subsequent  experience,  largely 
through  the  growth  of  the  British  cities  in  popula- 
tion since  1850.  In  the  year  1898-99,  all  but  48 
of  the  222  municipal  gas  plants  of  the  United 
Kingdom  paid  the  interest  and  sinking  fund  pay- 
ments properly  chargeable  against  them. 


CHAPTER   XII 

THE   ELECTRIC   LIGHTING   ACT,    1 882 

In  i  88  i,  the  incandescent  electric  lamp  was 
brought  to  the  "commercial  stage,"  and  there  were 
opened  in  the  United  States  eight  central  electric 
stations.  In  the  following  year  there  were  opened 
thirty  such  stations.  In  that  same  year,  1882, 
the  British  Edison  Co.  installed  a  small  plant  in 
London  and  operated  about  one  thousand  incan- 
descent lamps  in  the  hotels,  restaurants,  and  shops 
on  the  Holborn  Viaduct.  The  company  had  no 
statutory  powers,  but  counted  on  obtaining  them 
in  the  near  future.  Similarly,  a  company  in  the 
little  town  of  Godalming  supplied  eight  or  ten 
houses  with  incandescent  electric  lights,  besides  sup- 
plying six  arc  lights  and  a  few  incandescent  lights 
for  street  lighting.  Many  private  plants  for  arc 
lighting,  as  well  as  for  incandescent  lighting,  were 
established  in  the  same  year  in  industrial  and  mer- 
cantile establishments  and   places   of   amusement.* 

*  Report  of  Committee  on  the  Electric  Lighting  Bill,  1882 ;  2429 ;  and 
Report  of  Committee  on  Electric  Lighting  Provisional  Orders  Bills,  1883 ; 
q.  460. 

184 


THE   ELECTRIC   LIGHTING   ACT,   1882  185 

In  1882  the  speculation  in  London  in  the  shares 
of  the  several  electric  companies  representing  the 
Board  of  Trade  claims  of  the  rival  inventors  reached 
misjudges  Situa-  enormous  proportions,  the  shares  of 
tion  the  Brush  Co.,  upon  which  $20  had 

been  paid  in,  at  one  time  selling  at  $140.*  The 
Board  of  Trade  completely  misjudged  the  situation, 
as  it  had  misjudged  the  tramway  situation  in  1870 
and  in  1878.  It  concluded  that  the  electric 
lighting  industry  was  going  to  be  enormously 
profitable,  and  that  its  sole  care  must  be  to  see 
to  it  that  the  local  authorities  obtained  power 
to  acquire  on  "tramway  terms"  whatever  electric 
light  plants  should  come  to  be  established.  Ac- 
cordingly, the  Board  of  Trade  drew  up,  and  its 
President,  Mr.  Joseph  Chamberlain,  introduced 
into  Parliament  a  Bill  authorizing  the  granting 
of  charters  subject  to  the  proviso  that  the  local 
authorities  should  have  the  right  to  purchase  at 
replacement  value,  at  the  expiration  of  seven  years. 
Before  the  Select  Committee  to  which  the  Bill 
was  referred,  Mr.  T.  H.  Farrer,  Permanent  Sec- 
retary of  the  Board  of  Trade  from  1867  to  1886, 
defended  that  provision  with  the  statement  that 
the  Tramways  Act,  1870,  "in  no  way  interfered 
with  the  investment  of  capital"  — a  statement  with 

*  Hansard's  Parliamentary  Debates,  July  15,  1882,  p.  571,  Mr.  W. 
Fowler;  and  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882, 
Amendment  Bills,  1886,  q.  852;  Mr.  J.  S.  Forbes,  Chairman  of  Edison 
Swan  Electric  Light  Co. 


186    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

which  every  banker  in  the  city  would  have  taken 
issue.*  In  the  following  year,  1883,  Mr.  Fairer 
supported  the  provision  for  compulsory  sale  with 
the  argument  that  the  Board  of  Trade  was  not 
competent  to  ascertain  the  price  of  supplying  gas 
or  electric  current,  and  that,  therefore,  it  was  not 
competent  to  protect  the  consumer  by  the  exercise 
of  the  power  to  fix  the  price  of  gas  or  electric  cur- 
rent. Under  the  circumstances,  there  was  no  alter- 
native to  the  policy  of  public  ownership.  But, 
he  added,  public  ownership  could  be  established 
only  through  the  utilization  of  private  enterprise. 
He  said  the  Board  of  Trade  "felt  that  whilst  local 
authorities  represented  the  ratepayers,  they  were 
in  many  cases  inert  bodies  not  willing  to  adopt 
new  things,  in  some  cases  perhaps  prejudiced  by 
being  the  owners  of  gas  undertakings,  and  there- 
fore not  by  any  means  certain  in  all  cases  to  give 
the  ratepayers  the  benefit  of  this  new  invention. 
...  It  is  unnecessary  for  me  to  enlarge  upon  the 
question  of  private  capital  versus  public  bodies. 
I  think  all  experience  in  this  country  shows  that 
whilst  capital  is  extremely  active  and  will  always 
support  a  new  invention,  if  there  is  a  prospect  of 
success,  there  is  no  such  active  motive  power  upon 
the  part  of  governing  bodies;  they  take  up  a  thing 
when  it  is  done,  but  they  are  not  persons  generally 

*  Report  of  Committee  on  the  Electric  Lighting  Bill,  1882;    q.  42, 
51,  240,  241,  and  227. 


THE   ELECTRIC   LIGHTING   ACT,    1882  187 

willing,    nor   perhaps   are    they   the    best    persons, 
to  take  up  a  new  invention.'7  * 

Before  the  Select  Committee  of  1882,  Sir  John 
Lubbock,  head  of  the  eminent  banking  house  of 
Robarts,  Lubbock  &  Co.,  and  Chairman  of  the 
British  Edison  Co.,  argued  that  capital  would  not 
embark  in  electric  lighting  on  the  condition  of  merely 
getting  the  actual  value  of  the  plant  upon  the  expiry 
of  the  charter.  He  asked  for  twenty-one  years, 
with  compulsory  sale,  on  the  basis  of  fair  market 
value  .f  To  the  Government  itself  Sir  John  Lub- 
bock stated  that  the  British  Edison  Co.  would 
withdraw  from  the  field  if  compulsory  sale  at  struc- 
tural value  should  be  established.  The  Govern- 
ment replied:  "Well,  other  companies  are  quite 
ready  to  provide  the  capital ;  and  if  the  Edison  Co. 
does  not  see  its  way  so  to  do,  we  are  very  sorry."  J 
The  Select  Committee  itself  reported  in  favor  of 
fifteen  years,  with  compulsory  sale  at  standard 
value,  the  Chairman  of  the  Swan  Co.,  as  well  as 
the  Chairman  of  the  Hammond  Co.,  having  ac- 
cepted those  terms  under  protest,  fearing  that  the 
alternative  would  be  the  failure  of  the  House  of 
Commons  to  enact  any  measure  whatever.  § 

*  Report  of  Committee  on  Electric  Lighting  Provisional  Orders  Bill, 
188?;   q.  2  and  7. 

T  Report  of  Committee  on  the  Electric  Lighting  Bill,  1882;  q.  2862 
and  2863. 

%  Report  of  Lords  Committee  on  the  Electric  Lighting  Act,  1882, 
Amendment  Bills,  1886;   q.  1081,  Sir  John  Lubbock. 

§  Hansard's  Parliamentary  Debates,  August  14,  1882,  p.  1782,  Sir 
John  Lubbock;  and  July  15,  1882,  Mr.  Story-Maskelyne ;  Report  of 
Committee  on  the  Electric  Lighting  Bill,  1882;  q.  227. 


188    MUNICIPAL   OWNERSHIP   IN   GREAT    BRITAIN 

In  May,  1882,  The  Economist  (London),  the 
leading  financial  newspaper  in  the  world,  wrote: 
"The  electric  light  is  very  probably  a  great  inven- 
tion, and,  for  the  sake  of  argument,  let  us  take  it 
for  granted  that  its  future  development  will  be 
vast.  But  this,  unhappily,  cannot  be  argued  as 
a  reason  why  the  pioneer  companies  should  be 
prosperous.  The  history  of  our  company  manias 
has  always  proved  the  contrary."  The  newspaper 
cited  the  case  of  the  railway,  the  submarine  tele- 
graph, the  asphalt  pavement,  and  the  early  sewage 
schemes,  adding  that  the  list  might  be  extended  to 
any  length. 

In  the  House  of  Commons,  Mr.  Joseph  Cham- 
berlain, President  of  the  Board  of  Trade  and  Chair- 
man of  the  Select  Committee  to  whom  the  Bill 
had  been  referred,  said:  "The  Select  Committee 
were  guided  in  their  conclusions  by  this  line  of 
reasoning  —  that  it  was  their  bounden  duty  to 
accept  the  shortest  term  which,  at  the  same  time, 
would  leave  room  for  the  development  of  these 
experiments,  and  to  go  beyond  that  they  consid- 
ered would  be  to  prejudice  the  rights  of  the  public 
for  the  benefit  of  private  speculators.  The  objects 
of  the  Bill  were  twofold  —  first,  that  no  obstacle 
should  be  placed  in  the  way  of  the  development 
of  the  electric  light;  but,  in  the  second  place,  that 
the  interest  of  the  public,  as  a  whole,  should  be 
protected,  and  that  a  new  monopoly  should  not  be 


THE  ELECTRIC   LIGHTING  ACT,   1882  189 

set  up  as  in  the  case  of  the  gas  companies,  the 
water  companies,  and  the  telegraph  companies, 
only  to  be  purchased  at  a  ruinous  price.  The 
question  was,  whether  the  figure  adopted  (fifteen 
years)  was  the  right  one,  and,  as  to  that,  every 
member  could  form  his  own  judgment,  but  he  had 
it '  on  the  authorities  of  the  companies  concerned 
that  they  were  perfectly  satisfied  with  the  arrange- 
ment come  to  by  the  Committee;  the  only  com- 
pany that  was  dissatisfied  was  the  Edison  Light 
Co.  .  .  .  But  the  other  companies  declared  that, 
in  their  opinion,  the  term  was  sufficient  to 
justify  the  experiment  they  desire  to  make;  and 
seeing  what  had  been  done  without  any  parlia- 
mentary powers  at  all,  the  Committee  must  agree 
it  was  sufficient.  So  far  as  experiments  were  con- 
cerned, the  companies  could  do  without  any  Act 
of  Parliament;  but  what  they  asked  was  the  power 
to  enter  upon  streets  and  to  break  up  roads  to  lay 
their  wires,  and  certainly  a  monopoly  right  *  of 
that  kind  should  be  under  strict  limitations,  and 
be  confined  to  as  short  a  period  as  would  amply 
provide  for  the  due  development  of  the  experiment." 
Mr.  Chamberlain  added  that  "in  his  opinion, 
gas  companies  or  corporations  (municipalities), 
having  powers  to  supply  gas,  had  obtained  no  right 
whatever  to  be  protected  by  Parliament  against 
the  introduction  of  any  new  light."     But  he  fore- 

*  The  Act  of  1882  granted  no  monopoly  whatever. 


190     MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

saw  the  possibility  of  "great  vested  interests" 
defeating  the  establishment  of  the  new  industry 
by  opposing,  before  Parliamentary  Committees, 
the  Bills  asking  Parliament  to  confirm  the  Pro- 
visional Orders  issued  by  the  Board  of  Trade. 
Such  opposition  might  make  the  cost  of  obtaining 
a  Provisional  Order  prohibitive.  Therefore,  he 
provided  that  the  Board  of  Trade  should  have  power 
to  issue  licenses  which  should  run  seven  years  and 
need  not  be  confirmed  by  Parliament.  He  said 
that  if  they  proceeded  exclusively  by  way  of  Pro- 
visional Orders,  "the  probability  was  that  such 
Orders  might,  at  any  rate,  be  opposed  by  great 
vested  interests,  which  were  to  a  certain  extent 
hostile  to  the  new  illuminant;  and  the  venders 
and  consumers,  who  were  desirous  of  having  this 
new  light,  and  the  inventors  who  were  desirous  of 
introducing  it,  would  be  at  such  a  great  disadvan- 
tage in  consequence  of  the  enormous  cost  of  ob- 
taining powers  that  they  would  materially  inter- 
fere with  the  progress  of  the  new  science."  * 

Mr.  Slagg,  M.P.  for  Manchester,  said:  "His 
Honorable  Friend  who  had  just  spoken  had  com- 
oppositionto  plained  of  the  way  in  which  elec- 
Long  Franchises  trie  lighting  companies  were  to  be 
treated  under  the  Bill,  being  tied  down  by  the 
compulsory  sale  of  their  undertakings.  But  he 
took    this    view    very    strongly    in    regard   to   the 

*  Hansard's  Parliamentary  Debates,  July  15,  1882. 


THE   ELECTRIC   LIGHTING  ACT,  1882  191 

establishment  of  electric  light  companies  in 
districts  where  gas  was  at  present  supplied  by 
local  authorities;  who  must  necessarily  be  the 
best  judges  of  what  was  good  in  such  matters  as 
lighting.  He  did  not  deem  it  to  the  public  in- 
terest necessarily  that  outside  companies  should 
be  invited  to  come  in  and  make  an  exploitation 
ground  for  an  area  which  had  already  been  sup- 
plied (with  gas)  on  the  most  favorable  and  eco- 
nomical terms  by  existing  local  authorities.  Why 
should  they  encourage  any  outside  body  of  people 
to  come  and  abstract  a  profit  already  made  by  a 
local  body  (and)  applied  to  local  purposes  in  the 
matter  of  rates.  On  that  ground,  he  considered 
that  no  encouragement  was  due  from  that  House 
of  the  Legislature  in  getting  private  persons  to 
invade  towns  where  corporations  (municipalities) 
had  already  well  discharged  their  duty  to  satis- 
faction. He  would  take  the  case  of  his  own  cor- 
poration in  Manchester.  They  had  a  very  effi- 
cient gas  supply,  and  supplied  not  only  their  own 
local  area,  but  also  twenty-one  outside  townships, 
at  a  very  much  lower  rate  than  they  could  possibly 
supply  themselves.  What  would  happen  under 
the  aspirations  of  his  Honorable  Friend?  He 
wished  to  give  encouragement  and  protection  for 
the  Board  of  Trade  to  allow  companies  entirely 
outside  the  sympathy,  accommodation,  and  interest 
of    those    bodies    (municipalities)    to    obtain    and 


192    MUNICIPAL   OWNERSHIP  IN   GREAT  BRITAIN 

take  away  the  profits  which  they  had  been  accus- 
tomed to  enjoy  to  the  very  great  advantage  of  their 
community.  He  did  not  see  that  electric  light- 
ing companies  had  any  logical  ground  for  assum- 
ing such  a  position.  ...  It  would  be  rather  too 
hard  to  ask  those  communities  whose  territory 
had  been  invaded,  and  whose  money  had  been 
extracted  to  pay  huge  dividends,  to  compensate 
the  companies  (at  the  expiry  of  fifteen  years)  for 
the  business  they  had  planted  there.  ...  He  did 
not  see  why  outsiders  should  be  let  in  to  make 
happy  hunting  grounds  of  the  corporation  area. 
Fifteen  years  he  thought  quite  sufficient,  the  com- 
panies were  satisfied  with  that  term,  and  he  should 
certainly  vote  for  keeping  that  term."  * 

In  the  House  of  Lords,  the  Lord  Chancellor 
said:  "There  was  no  wish  to  discourage  enter- 
prise in  any  way;  but  at  the  same  time,  they  were 
anxious  not  to  repeat  the  fatal  errors  which  were 
made  in  the  case  of  the  gas  and  water  companies. 
It  would,  no  doubt,  be  satisfactory  to  noble  Lords 
to  know  that  not  only  had  all  the  companies  ex- 
pressed themselves  as  satisfied  with  the  arrange- 
ments proposed  in  the  Bill,  but  the  Board  of  Trade 
had  information  to  the  effect  that  one  company, 
when  the  Bill  passed,  would  make  as  many  as 
95  applications"  for  Provisional  Orders.f 

*  Hansard's  Parliamentary  Debates,  July  15,  1882,  p.  569  and  615. 
t  Ibid.,  August  3,  1882,  p.  576. 


THE   ELECTRIC   LIGHTING  ACT,   1882  193 

Lord  Sudely  said  the  main  opposition  to  the  Bill 
came  from  the  gas  companies,  who  objected  to 
the  clause  authorizing  the  issue  of  licenses.* 

The  Marquess  of  Salisbury  said:  "He  thought 
the  terms  offered  the  electric  companies  were 
not  quite  fair.  As  the  matter  stood,  those  com- 
panies would  have  to  carry  on  their  undertakings 
with  the  full  consciousness  that  all  the  risks  would 
be  theirs,  and  all  the  profits  would  go  to  the  pub- 
lic —  that  was  to  say,  if  they  failed,  no  one  would 
come  forward  to  help  them,  and  if  they  succeeded, 
the  municipality  would  step  in  and  sweep  up  all 
the  benefits.  The  noble  Earl  opposite  had  said, 
in  defence  of  the  policy  of  the  Bill,  that  they  should 
be  very  cautious  on  behalf  of  the  public.  For 
his  part,  he  apprehended  that  their  first  duty  was 
to  consult  the  interests  of  the  public,  not  by  think- 
ing merely  of  the  profits  which  the  municipality 
might  or  might  not  make  some  fifteen  years  hence, 
but  by  thinking  how  some  good  would  come  to  the 
consumers  of  an  article  which  would  benefit  them 
enormously.  It  was  the  public  which  would  suffer 
if  these  companies  were  not  allowed  to  come  into 
the  field,  and  if  this  new  instrument  of  power, 
which  science  had  discovered,  were  compelled  to 
remain   useless   and   unfruitful   for   several  years.f 

The  House  of  Lords  amended  the  Bill,  author- 

*  Hansard's  Parliamentary  Debates,  August  3,  1882,  p.  570. 
t  Ibid.,  August  3,  1882,  p.  575. 


194    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

izing  the  Board  of  Trade  to  extend  the  life  of  a 
charter  to  not  to  exceed  twenty-one  years.  The 
House  of  Commons  accepted  the  amendment. 
Mr.  Chamberlain  said:  " Fifteen  years  was  a 
compromise,  and  at  the  time  when  the  question 
was  last  discussed  in  that  House,  he  was  of  opinion 
that  it  was  a  fair  compromise;  but,  since  then, 
further  information  had  been  brought  before  him 
which  had  certainly  made  a  difference  in  his  opin- 
ion, and  which  he  thought  might  alter  that  of  his 
Honorable  Friend.  At  the  time  when  the  matter 
was  discussed  before  the  Select  Committee,  it  was 
certainly  the  opinion  of  the  Committee  that,  in 
the  present  experimental  stage  of  electric  lighting, 
there  would  not  be  any  considerable  expenditure 
of  capital;  and  if  it  was  proposed  to  try,  in  an  ex- 
perimental way,  the  lighting  of  a  street,  or  of  a 
few  houses,  or  a  small  district,  a  monopoly  *  of 
fifteen  years  would  be  quite  sufficient.  But  al- 
ready, in  the  few  months  during  which  this  matter 
had  been  under  discussion,  very  great  progress 
had  been  made  with  electric  lighting,  and  it  now 
seemed  very  probable  that  large  installations  would 
be  made,  in  some  cases  involving  hundreds  of 
thousands  of  pounds  sterling,  and  it  did  not  seem 
to  him  that  fifteen  years  would,  in  all  cases,  be 
sufficient  to  justify  such  an  outlay,  and  that  if  the 

*  The  Act  of  1882  conferred  no  monopoly  whatever. 


THE   ELECTRIC   LIGHTING  ACT,    1882  195 

companies  were  strictly  confined  to  that  short  time, 
they  would  not  be  induced  to  spend  their  capital, 
and  give  that  development  to  electric  lighting 
which  was  desired."  He  added  that  twenty-one 
years  was  the  maximum,  that  the  local  authorities 
would  be  free  to  make  any  arrangements  with 
companies  for  periods  less  than  twenty-one 
years.* 

In  1883,  the  electric  light  companies  took  out 
fifty-five  charters;  in  1884,  four  charters;  in  1885, 
none;  in  1886,  one  charter;  and  in  1887  and  1888, 
Development  they  took  out  none.  At  the  close  of 
checked  1888,  all  but  one  of  the  foregoing  char- 

ters had  been  revoked  by  the  Board  of  Trade  for 
non-use.  The  solitary  charter  then  in  existence  was 
held  by  the  Chelsea  Electricity  Supply  Co.  for  the 
area  of  Chelsea,  a  part  of  Metropolitan  London. 
The  Chelsea  company  did  not  begin  to  supply  cur- 
rent until  September,  1889. 

At  the  close  of  1888,  there  were  in  operation  in  the 
United  Kingdom  twelve  central  electric  stations 
which  sold  current  to  a  limited  number  of  custom- 
ers, f    Two  of  those  plants  operated  under  seven 

*  Hansard's  Parliamentary  Debates,  August  14,  1882,  p.  1779. 


t  Companies  operating  under  Seven-year  Licenses 


Year  of 
Opening 


St.  Anstell 

Kensington  and  Knightsbridge  (London) 


1886 
1887 


[Footnote  continues  on  page  /96J 


196    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

years'  licenses,  on  terms  which  precluded  "such  ex- 
penditure of  capital  as  is  necessary  for  a  successful 
commercial  undertaking  on  a  large  scale,"  to  em- 
ploy the  words  of  Mr.  T.  H.  Fairer,  Permanent 
Secretary  of  the  Board  of  Trade.*  The  ten  re- 
maining plants  were  operated  under  the  so-called 
"marauding"  system.f  The  proprietors  of  those 
plants  stretched  wires  from  housetop  to  house- 
top, when  they  could  obtain  the  consent  of  the 
owner,  and  crossed  the  streets  above  the  so-called 
"area  of  ordinary  user."  They  were  at  the  mercy 
of  the  owners  of  the  houses  who  gave  their  consent 
only  for  short  periods,  generally  a  year  or  less. 
They  were  also  liable  to  indictment  under  the  charge 


So-called  "  Marauding  "  Companies 


Eastbourne 

Hastings , 

Liverpool 

London  (a  few  square  miles) 

Sheffield 

Taunton  

Royal  I^eamington  Spa       .     . 
Brighton  and  Hove  .     .     .     , 
Grosvenor  Gallery  (London) 
Chatham  and  Rochester     .     . 


Year  of 

Opening 


1882 
1882 
1883 
1885 
1886 
1887 
1887 

? 

? 
1888 


This  table  is  based  upon  data  obtained  from :  Report  by  the 
Board  of  Trade  respecting  the  applications  to  and  Proceedings  of  the  Board 
of  Trade  under  the  Electric  Lighting -Acts,  1892  to  1902,  during  the  year 
1903-4;  Gucke's  Manual  of  Electrical  Undertakings,  current  issues; 
and  testimony  given  before  various  Parliamentary  Select  Committees. 

*  Report  of  Committee  on  Electric  Lighting,  Provisional  Orders 
Bills,  1883;    q.  117. 

t  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amend- 
ment Bills,  1886;  q.191 1 ;  Mr.  W.  H.  Preece,  Electrician  to  the  Post  Office. 


THE   ELECTRIC   LIGHTING  ACT,    1882  197 

of  being  a  common  nuisance.*  Under  the  circum- 
stances the  "marauding"  companies  were  pre- 
cluded from  giving  any  satisfactory  or  general 
service.  One  of  the  most  important  of  them, 
that  at  Brighton,  had  only  12  or  15  miles  of  wire. 
The  significance  of  the  "marauding"  companies  is 
the  same  as  that  of  the  tramway  companies  which 
built  tramways  in  the  latter  sixties  without  any 
Parliamentary  authority — that  is,  without  legal 
power  to  break  up  the  streets.  Both  of  those 
classes  of  enterprise  show  the  tenacity  of  the  Brit- 
ish capitalists,  the  eagerness  of  these  men  to  take 
up  new  inventions,  and  the  length  they  were  pre- 
pared to  go  in  overcoming  obstacles. 

In  the  United  States  there  were  opened:  in  1881, 
8  central  electric  stations  supplying  current  to  the 
public;  in  1882,  30  central  electric  stations;  in 
1883,  27;  in  1884,  47;  in  1885,  55;  in  1886, 
100;  in  1887,  147;  and  in  1888,  160;  making 
a  grand  total  of  574  central  electric  stations  in 
operation  at  the    close  of    i888.f    On    the    basis 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amend- 
ment Bills,  1886 ;  q.  2074 ;  Mr.  Robert  Hunter,  Solicitor  to  the  Post  Office. 
"  When  the  Electric  Lighting  Act,  1882,  was  passed  it  was  deemed  that 
no  electric  works  could  be  constructed  without  statutory  powers  of  break- 
ing up  streets  and  carrying  wires  from  point  to  point.  But  since  that 
Act  was  passed,  it  has  been  decided  in  the  case  of  Wandsworth  District 
Board  v.  The  United  Telephone  Co.  that  if  wires  were  placed  at  a  sufficient 
height  above  the  street  to  be  out  of  what  was  called  the  ordinary  area 
of  user,  the  local  authority  have  no  power  by  virtue  of  their  possessory 
interest  in  the  soil  of  the  street  to  interfere  with  the  wires.  It  did  not 
decide  the  question  whether  if  it  could  be  shown  that  those  wires  were  a 
nuisance,  the  local  authorities  might  take  proceedings  against  them  or 
anybody  else." 

t  United  States  Census  Bulletin,  No.  5,  1903. 


198     MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

of  assigning  one  central  electric  light  station  to  one  city 
or  town,  there  were,  in  1888,  enough  central  electric 
stations  to  give  one  station  to  each  city  and  town  with 
8000  or  more  inhabitants.  That  assignment  left 
over  57  stations  to  be  distributed  among  75  towns, 
with  a  population  of  7000  and  less  than  8000. 

The  cities  of  Germany,  in  part  under  the  influ- 
ence of  the  example  of  British  legislation,  also 
adopted  the  policy  of  bartering  in  electric  lighting 
franchises.  The  result  was  that  German  private 
enterprise  was  excluded  from  the  field  of  public 
electric  lighting  while  that  industry  was  in  the 
formative  period.  The  conditions  enacted  by  the 
German  cities  were  so  onerous  that  capitalists 
could  not  accept  them  so  long  as  new  inventions 
in  electrical  machinery  were  liable  to  be  made  any 
day  and  thus  render  obsolete  the  existing  machin- 
ery. The  result  was  that  at  the  close  of  1888, 
there  were  in  operation  in  Germany  only  fifteen 
central  electric  stations,  supplying  current  to  the 
general  public.  Not  until  1894  did  the  German 
capitalists  feel  justified  in  taking  up  electric  light- 
ing on  any  considerable  scale.  *    The  work  of  es- 

*  Elektrotcchnische  Zeitschrift ;  January  12,  1905. 
Central  electric  stations  opened  :  — 

1882  to  1888 15 

1889  to  1890 15 

1891  to  1892 35 

1893  to  1894 67 

1895 63 

'896 74 

1897 IQ6 


1898 152 

1899 138 

1900 140 

1901 88 

1902 62 

1903. 55 


1904'     .    . 
1  January  to  March,  inclusive. 


THE   ELECTRIC   LIGHTING   ACT,   1882  199 

tablishing  the  industry  and  bringing  it  to  the  point 
where  capital  could  afford  to  accept  the  burden- 
some terms  made  by  the  German  cities  was  done 
by  American  capitalists,  who  operated  under  the 
fostering  stimulus  of  liberal  charters. 


CHAPTER  XIII 

BACK  TO  THE  DARK  AGES 

In  1885  the  Gladstone  Ministry,  which,  under  the 
leadership  of  Mr.  Joseph  Chamberlain  as  President 

Attempts  to  Liber-  of  the  Board  of  Trade,  had  been 
alize  the  Electric  responsible  for  the  Electric  Lighting 
Lighting  Act         Act>     l8g2j    was    repiaceci    by    the 

Salisbury  Ministry.  In  1886,  Lord  Houghton,  as 
the  representative  of  the  Salisbury  Government, 
introduced  in  the  House  of  Lords  a  Bill  proposing 
to  extend  the  length  of  electric  lighting  charters  to 
thirty  years,  and  to  forty- two  years  in  any  case  in 
which  the  local  authority  concerned  should  give  its 
assent.  At  the  same  time,  the  Earl  of  Camperdown 
introduced  in  the  House  of  Lords  a  Bill  proposing 
forty-two  years  as  the  life  of  charters,  and  providing 
for  compulsory  sale  on  the  basis  of  allowance  for  good- 
will —  that  is,  present  and  prospective  profits.  Lord 
Rayleigh,an  eminent  scientist,*  introduced  a  third  Bill 

*  Rayleigh,  3d  Baron,  John  William  Strutt,  D.C.L.,  LL.D.,  F.R.S., 
Scientific  Adviser  to  Trinity  House  since  1896;  Professor  of  Experi- 
mental Physics,  Cambridge,  1879  to  1884;  Secretary  to  Royal  Society, 
1887  to  1896;  Professor  of  Natural  Philosophy,  Royal  Institution,  since 
1887. —  Who's  Who,  1905. 


BACK   TO   THE   DARK   AGES  201 

which  proposed  to  protect  the  investor  by  abolish- 
ing compulsory  sale,  and  proposed  to  protect  the 
consumer  by  establishing  a  sliding  scale  of  price  and 
dividend,  under  which,  starting  from  a  given  point 
of  maximum  price  and  dividend,  a  company  would 
be  allowed  to  add  a  quarter  of  one  per  cent  to  its 
dividend  every  time  that  it  reduced  its  charge  for 
current  by  a  stated  amount.  Lord  Rayleigh's  Bill 
proposed  also  that  whenever  a  company  should  issue 
new  shares  for  the  purpose  of  enlarging  its  plant,  it 
should  sell  them  at  public  auction,  and  the  pre- 
miums realized,  if  any,  should  be  invested  in  the 
plant,  but  should  not  be  allowed  to  draw  dividends 
or  interest.  Lord  Rayleigh's  Bill  proposed  to  put 
the  electric  light  companies  on  the  same  footing  as 
the  gas  companies  —  in  order  that  the  electric  light 
might  be  enabled  to  compete  with  the  gas  light. 

The  sliding  scale  of  price  and  dividend,  together 
with  the  auction  clause  for  new  issues  of  stock,  had 
been  inserted  in  all  Acts  of  Parliament  affecting  gas 
companies  passed  since  1877*  And  in  1883,  Mr. 
T.  H.  Fairer,  Permanent  Secretary  of  the  Board  of 
Trade  from  1867  to  1886,  had  stated  that  they 
"seemed  to  have  worked  well,"  and  that  they  had 
"to  some  extent  modified,  if  not  put  an  end  to  the 
abuses"  from  which  the  consumers  of  gas  had  suf- 
fered.   Those    statements,    Sir   Robert    Giffen,  the 

*  The  Journal  of  Gas  Lighting,  Water  Supply,  and  Sanitary  Im- 
provements, April  17,  1877.  The  clauses  in  question  were  inserted  in 
only  45  of  the  360  Acts  affecting  gas  companies  enacted  in  1856  to  1876 


202     MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

eminent  statistician,*  allowed  to  stand  unmodified  in 
the  1902  edition  of  Mr.  Farcer's  book  on  The  State 
in  Its  Relation  to  Trade,  for  which  he  wrote  a  supple- 
mentary chapter. 

The  sliding  scale  and  auction  clauses  were  adopted 
rather  late  in  the  history  of  gas  lighting.  Had  they 
been  adopted  earlier,  they  would  have  been  still 
more  effective  in  protecting  the  consumer.  In  1882, 
the  year  preceding  the  first  issue  of  Mr.  Farcer's 
book,  the  capital  that  had  been  raised  under  the 
auction  clauses  was  $10,330,000,  and  the  premiums 
realized  thereon  had  aggregated  $4,788,000.  In 
1900  the  respective  figures  were:  $55,152,000  and 
$24,336,000.  The  latter  figure  was  8.9  per  cent  of 
the  total  share  capital  of  the  gas  companies,  and  7.3 
per  cent  of  the  total  share  and  debenture  capital. 

The  three  Bills  introduced  in  the  House  of  Lords 
in  1886  were  referred  to  a  Select  Committee  of  the 
House  of  Lords,  which  heard  evidence  from  leading 
A  study  of  the  financiers,  manufacturers  of  elec- 
Bureaucratic  trical  machinery,  electrical  engineers, 
Mlnd  scientists,   the  town  clerks  of   lead- 

ing cities,  the  representatives  of  the  Association 
of  Municipal  Corporations,  Sir  H.  G.  Calcraft, 
Permanent  Secretary  of  the  Board  of  Trade  from 


*  Giffen,  Sir  Robert,  K.C.B.,  sub-editor  of  Globe,  1862  to  1866; 
assistant  editor  of  Economist,  1866  to  1876;  Chief  of  Statistical  Depart- 
ment of  Board  of  Trade,  1876  to  1882;  Assistant  Secretary  Board 
of  Trade,  and  afterward  Controller-General  of  Commercial,  Labor 
and  Statistical  Departments,  1882  to  1897. — Who's  Who,  1905. 


BACK  TO   THE  DARK  AGES  203 

1887  to  1892,  and  a  number  of  British  town  coun- 
cillors. The  evidence  of  the  town  clerks  gives  us 
an  insight  into  the  working  of  the  bureaucratic 
mind,  and,  when  supplemented  by  the  evidence  of 
the  town  councillors,  provides  us  with  a  gauge  of 
the  compass  of  mind  of  the  British  town  clerks  and 
municipal  councillors,  that  makes  us  reject  once  and 
for  all  the  argument  frequently  advanced  that  the 
experience  gained  under  municipal  ownership  in 
Great  Britain  proves  that  governmental  activity 
can  take  the  place  of  private  enterprise.  The  evi- 
dence of  the  Permanent  Secretary  of  the  Board  of 
Trade  is  a  fitting  climax  to  the  uninterrupted  record 
of  incapacity  to  sympathize  with  the  man  of  affairs 
which  the  Board  of  Trade  made  in  the  eventful  and 
pregnant  period  of  1870  to  1886.  The  evidence  of 
the  officials  and  the  politicians  reads  like  the  libretto 
of  one  of  Gilbert  and  Sullivan's  comic  operas,  and 
shows  us  one  road  that  we  can  travel  if  we  shall 
elect  to  return  to  the  Dark  Ages  by  exalting  the 
Municipality  and  the  State  above  the  man  of  affairs. 
Let  us  begin  with  the  testimony  of  the  scientists 
and  engineers  to  the  effect  that  the  failure  to  establish 
plants  for  the  sale  of  current  to  the  public  was  not 
due  to  the  state  of  the  science  of  electrical  engineer- 
ing. Mr.  George  Forbes,  F.R.S.,  formerly  Pro- 
fessor of  Natural  Philosophy,  Anderson's  College, 
Glasgow,  and  at  present  Electrical  Engineer  for  the 
works  at  Niagara  Falls,  said:    "I  may  say  that  in 


204    MUNICIPAL   OWNERSHIP    IN   GREAT   BRITAIN 

1882  there  was  nothing  in  the  engineering  question 
which  should  have  prevented  electricity  from  being 
economically  supplied  in  a  great  many  cases.  In 
1886,  it  can  be  economically  supplied  in  every  case 
that  can  arise  in  Great  Britain."  Lord  Ashford 
queried:  "We  have  had  a  good  deal  of  evidence 
generally,  not  from  electricians,  that  there  is  a  diffi- 
culty in  distributing  from  a  central  station ;  can  you 
contradict  that  authoritatively  as  an  engineer?" 
The  reply  was:  "I  cannot  more  positively  than  I 
have  already  done  in  my  evidence  (in  chief) ;  there 
is  no  doubt  about  it."  Mr.  Forbes  was  very  em- 
phatic in  his  testimony  that  the  Act  of  1882  had 
killed  the  industry  of  lighting  from  central  stations. 
He  said  he  could  not  conceive  of  any  person  invest- 
ing capital  in  that  industry  so  long  as  it  was  so 
heavily  handicapped  in  comparison  with  its  formi- 
dable competitor,  the  gas  lighting  industry.  * 

Mr.  W.  H.  Preece,  F.R.S.,  Electrician  to  the 
Post  Office  since  1877,1  said:  "The  advance  that 
has  been  made  in  our  (British)  knowledge  of  the 
scientific  principles  underlying  electric  lighting  has 
been  very  great,  but  in  practice  the  development  of 
the  industry  (in  Great  Britain)  has  been  very  slow. 
.  .  .  The  development  in  the  United  States  has 
been  marvellous ;  there  is  no  town  of  any  consequence 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amend- 
ment Bills,  1886;  q.  187,  1881,  and  189. 

t  Engineer-in-Chief  and  Electrician,  1892  to  1899;  Consulting 
Engineer  to  the  Post  Office  and  Colonies,  since  1899. 


BACK   TO   THE  DARK   AGES  205 

that  has  not  its  streets  lighted  by  the  electric  light, 
and  most  of  the  manufactories  are  being  lighted  up." 
He  added  that  since  1882  the  cost  of  the  dynamo 
had  been  reduced  by  one -third,  and  the  output 
had  been  increased  threefold,  which  made  "the 
commerical  value  of  the  dynamo  nine  times  what  it 
was  in  1882."  * 

To  Mr.  J.  N.  Shoolbred,  who  was  the  consulting 
electrician  to  a  great  many  local  authorities,  a  mem- 
ber of  the  committee  said:  "Then  you  differ  from 
those  (witnesses)  who  say  that  the  electric  light  is 
merely  a  light  of  luxury?"  The  witness  replied: 
"That  expression  has  been  used  here,  I  think,  by 
several  witnesses  .  .  .  not  in  any  way  as  applied 
to  the  light  altogether,  but  because  in  the  present 
circumstances  of  the  law  it  becomes  a  light  of  luxury 
for  those  who  could  afford  to  lay  special  installations 
(of  their  own)  in  their  houses.  That  it  is  not  a 
light  of  luxury  is  proved  by  the  number  of  incan- 
descent lights,  not  to  speak  of  arc  lights,  that  exist 
in  essentially  commercial  establishments  and  in- 
dustrial works  over  the  country,  and  subject  to  the 
keen  competition  of  commerce,  where  the  new  light 
holds  its  own  against  gas  light."  The  witness  was 
further  asked:  "Are  you  aware,  from  your  own 
knowledge,  of  any  industrial  works  subject,  as  you 
say,  to  keen  competition,  where  the  electric  light  is 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882;  Amend- 
ment Bills,  1886;  q.  1910,  1909,  and  2044. 


206     MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

used  in  the  incandescent  form  as  well  as  in  the  arc- 
light  form?"  He  replied:  "I  am  aware  of  a  very 
large  number  of  various  industries  that  exist  about 
the  country  in  cotton,  wool,  and  silk  weaving,  and 
dye  works,  and  lace  and  hosiery,  and  a  number  of 
other  mills  .  .  .  also  in  sugar  refineries,  and  we  know 
that  they  are  running  on  a  very  narrow  margin  and 
have  no  money  to  waste."  * 

Let  us  turn  now  to  the  evidence  of  the  men  who 
were  unable  to  raise  money  under  the  Act  of  1882, 
as  well  as  to  the  evidence  of  the  men  who  declined 
to  furnish  money  for  electric  lighting  ventures  under 
that  Act. 

Mr.  J.  S.  Forbes,  Chairman  of  Edison  &  Swan 
United  Electric  Light  Co.  stated  that  no  share- 
holder in  the  company  had  subscribed  for  less 
than  $25,000  and  that  "two  or  three  of  them  happen 
to  be  not  only  large  capitalists  in  London,  but  the 
most  astute  men  that  I  know  of  anywhere,  and  they 
came  to  the  conclusion  that  the  conditions  of  the 
concession  were  so  onerous  that  there  was  no  good 
attempting  to  raise  any  capital  for  such  purpose. 
.  .  .  The  Board  of  Trade,  who  have  no  greater 
admirer  than  I  am  for  their  perfect  disinterestedness, 
tried,  and  I  am  bound  to  say  very  much,  at  the  in- 
stigation of  promoters  of  these  Orders, f  to  make  the 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amend- 
ment Bills,  1886;   q.  2481  to  2483. 

t  The  witness  means  that  the  Board  of  Trade  misjudged  the  situation, 
being  misled  by  the  "  boom"  in  the  shares  of  the  electric  companies. 


BACK   TO   THE   DARK   AGES  207 

best  bargain  they  could  for  the  public,  and  they 
succeeded  in  making  a  bargain  which  nobody  upon 
the  other  side  now  thinks  it  worth  while  to  carry  out." 
Mr.  Forbes  added  that  one  of  the  objections  urged 
by  the  bankers  who  declined  to  underwrite  the 
securities  of  the  Edison  &  Swan  Co.  was  that 
that  company  had  six  Provisional  Orders,  that 
if  four  should  turn  out  profitable  and  two  should 
prove  unprofitable,  the  local  authorities  would  buy 
the  former  and  leave  the  latter  upon  the  hands  of 
the  company.  Mr.  Forbes'  testimony  on  the  ques- 
tion how  new  industries  are  brought  into  being  was 
exceedingly  instructive.  He  said  it  was  a  delusion 
to  suppose  that  one  could  peddle  out  to  the  general 
public  directly  the  securities  of  a  company  engaged 
in  pioneer  work.  The  public  at  large  would  buy 
only  the  securities  of  well-established  industries,  such 
as  the  railway  and  gas  lighting  industries.  The  only 
purchasers  of  securities  of  pioneer  companies  were 
the  large  banking  houses.  The  latter  purchased  the 
securities,  held  them  until  it  had  been  demonstrated 
that  the  new  industry  would  be  successful,  and  then 
sold  them  to  the  general  public,  who  bought  in  re- 
liance upon  the  reputation  of  the  banking  houses  for 
sound  judgment.  Mr.  Forbes  also  gave  exceeding 
instructive  evidence  upon  the  risk  and  cost  attendant 
upon  the  upbuilding  of  new  industries.  He  said 
that  the  Edison  &  Swan  Co.,  thus  far  had 
expended  $1,525,000,  but  that  to  date  they  had  not 


208     MUNICIPAL   OWNERSHIP   IN  GREAT   BRITAIN 

divided  one  shilling  of  profit.  If  they  were  to  be 
bought  out  at  that  time  on  the  basis  of  "structural" 
value  or  "replacement"  value,  they  would  get 
$144,250.  For  patents  they  had  paid  Mr.  Swan 
$300,000  and  Mr.  Edison  $425,000.*  They  had 
eight  dynamos  that  had  cost  $10,000  each;  equally 
efficient  dynamos  could  be  built  in  1886  for  $1000 
apiece.  Again,  enormous  sums  had  been  spent  in 
parliamentary  fees  in  connection  with  the  hearings 
of  the  Select  Committee  on  the  Electric  Lighting 
Act,  1882,  as  well  as  in  connection  with  the  hearings 
of  the  committees  to  which  had  been  referred  the 
Bills  for  the  Professional  Orders  obtained  in  1883. 
Upon  the  losses  incurred  in  unsuccessful  experi- 
ments, Mr.  Forbes  commented  as  follows:  "If  we 
had  known  then  what  we  know  now,  we  should  not 
have  spent  the  $1,525,000  as  we  did,  but  if  we  had 
not  spent  them,  we  should  not  now  know  what  we 
know."  f 

The  Edison-Swan  Co.  dismantled  the  plant  built 
on  the  Holborn  Viaduct  in  1882,  before  the  Act  of 
1882  had  been  passed.  The  company  also  had 
spent  $80,000  upon  a  plant  which  was  to  supply 
8000  or  9000  lamps  in  Victoria  Station  and  the 
neighborhood.     An   expenditure  of  $10,000  would 

*  The  testimony  of  British  town  clerks  was  that  patents  were  not 
"  tangible"  assets,  and  that  it  was  foolish,  if  not  reprehensible,  for  people 
to  spend  money  on  them. 

f  Report  of  Lords  Committee  on  the  Electric  Lighting  Act,  1882,  Amend- 
ment Bills,  1886;  q.  793  to  795,  1009,  1028,  1029,  900  to  930,  863,  797, 
1015,  1006,  801  to  804,  and  245  to  269. 


BACK   TO   THE   DARK   AGES  209 

have  sufficed  to  install  a  plant  to  light  Victoria  Station 
alone.  Unable  and  unwilling  to  operate  under  the 
Act  of  1882,  the  company  confined  itself  to  lighting 
Victoria  Station.* 

Sir  F.  J.  Bramwell,  D.C.L.,  LL.D.,  F.R.S.,  one 
of  the  most  eminent  engineers  of  Great  Britain,  f 
said:  "I  have  not  said  it  before,  but  I  should  like 
Blighting  Effect  to  say  it  now.  Imagine  an  industry 
of  the  Act  of  1882  0f  this  kmc[  competing  with  an  es- 
tablished industry,  —  gas,  —  and  being  gravely  told 
that  they  may  charge  such  a  price  as  to  enable 
them  to  get  back  their  capital  in  that  limited  time 
(21  years).  It  is  clear  to  my  mind  that  those  who 
suggest  that  cannot  understand  what  the  difficulties 
are.  The  electric  lighting  companies  will  have  to 
go  down  to  the  lowest  prices  to  obtain  their  custom. 
...  I  would  say,  and  it  is  no  use  making  any 
secret  about  it,  that  I  attribute  the  failure  to  make 
greater  use  of  electricity  in  this  country  entirely 
to  the  character  of  the  Act  of  1882.  I  know  of  no 
other  cause  that  would  have  prevented  people  from 


*  Report  of  Lords  Committee  on  the  Electric  Lighting  Act,  1882, 
Amendment  Bills,  1886;  testimony  of  R.  E.  Crompton,  q.  282  to  289 
and  352  to  359. 

t  Civilian  Member  of  Ordnance  Committee  since  commencement  in 
1881;  President  Institution  of  Civil  Engineers,  1884-85;  President 
Institution  of  Mechanical  Engineers,  1874-75 ;  Chairman  of  Executive 
Committee  of  Inventions  Exhibition,  1884;  President  British  Associa- 
tion, 1888. 

In  1895  and  1896,  the  firm  of  Bramwell  &  Harris  were  consulted  in 
reference  to  a  supply  of  electricity  under  high  tension  from  the  Catskill 
Mountains  to  New  York  City,  from  Mount  Cenis  to  Turin  (11,000  h.p.) 
and  from  Simplon  to  Milan  (23,000  h.p.)- 


210     MUNICIPAL   OWNERSHIP   IN   GREAT  BRITAIN 

embarking  their  capital  in  an  undertaking  of  that 
kind."  Lord  Ashford  asked  the  witness:  "You 
have  had  very  great  experience  of  Parliamentary 
Committee  Rooms:  would  you  not  think  that  a 
Bill  like  that  of  Lord  Rayleigh,  which  did  not  pro- 
vide for  purchase  at  the  end  of  any  number  of  years, 
would  find  some  difficulty  when  it  got  into  another 
place  (the  House  of  Commons)  in  a  Committee 
Room?"  The  reply  came:  "It  really  depends 
upon  the  present  condition,  and  I  speak  with  all 
respect,  of  the  craze  for  making  local  authorities 
into  traders,  that  is,  whether  on  the  flood  or  the 
ebb."  * 

Mr.  J.  M.  Macdonald,  a  partner  in  Matheson  & 
Co.,  Lombard  Street,  said  the  Act  of  1882 
would  effectually  deter  any  investors  because  of  the 
compulsory  sale  clause.  Lord  Houghton  queried: 
"You  said  just  now  that  what  the  public  objected 
to  was  an  undue  profit.  Why  should  they  object 
to  the  companies  making  large  profits  if  the  price 
is  not  high;  in  what  way  is  it  against  the  public 
interest?"  The  witness  replied:  "I  think  it  is  an 
unreasonable  objection,  but  I  must  recognize  that 
it  does  exist.  There  is  a  prejudice  against  what 
people  call  an  unearned  increment."  f 

Mr.  Lionel  Cohen,  M.P.,  late  senior  partner  of 

*  Report  oj  Lords  Committee  on  the  Electric  Lighting  Act,  1882, 
Amendment  Bills,  1886;  q.  786,  377,  378,  and  580. 

t  Report  of  Lords  Committee  on  the  Electric  Lighting  Act,  1882, 
Amendment  Bills,  1886;  q.  1088  to  1092,  and  mo. 


BACK   TO   THE   DARK   AGES  211 

Louis  Cohen  &  Sons,  an  eminent  Stock  Exchange 
firm,  said:  "I  consider  that  the  Act  of  1882  has  not 
only  retarded  electrical  enterprise,  but  that  it  is 
almost  prohibitive  to  the  rinding  of  capital,  under 
the  compulsory  sale  clause.  .  .  .  Then  again,  it 
seems  to  me  that  the  number  of  fetters  and  conditions 
with  which  the  Act  bristles  at  present,  I  do  not  know 
whether  they  are  necessary  in  an  engineering  point 
of  view,  would  certainly  deter  prudent  people.  .  .  . 
What  a  man  looks  for  when  he  invests  his  money 
is  to  have  a  clear  and  simple  undertaking  which  he 
can  understand  for  himself,  without  the  aid  of  a 
lawyer,  or  even  of  a  broker.  .  .  .  But  it  is  utterly 
impossible  to  attract  capital  if  it  bristles  with  so 
many  precautions  and  compensations  as  this  Act 
seems  to  have." 

In  the  course  of  Mr.  Cohen's  testimony,  the  Chair- 
man of  the  Committee,  the  Earl  of  Camperdown, 
said:  "It  is  to  be  feared  that  we  should  find  some 
difficulty  in  persuading  Parliament  to  reconsider  the 
decision  arrived  at  in  1882,  to  the  effect  that  it  was 
not  expedient  to  allow  the  creation  of  any  new  per- 
manent interest  —  "  that  is,  to  abandon  the  principle 
of  compulsory  sale.* 

Mr.  Henry  Hucks  Gibbs,  senior  partner  in  Antony 
Gibbs  &  Sons,  Bankers,  a  Director  in  the  Bank  of 
England,  and  one  time  Governor  of  the  Bank  of 

*  Report  of  Lords  Committee  on  the  Electric  Lighting  Act,  1882, 
Amendment  Bills,  1886;  q.  7,  9,  and  14. 


212    MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

England,  supported  the  testimony  of  the  preceding 
witness. 

Let  us  turn  now  to  the  consideration  of  the  evidence 
by  means  of  which  the  town  clerks,  the  town  coun- 
cillors, and  the  Permanent  Secretary  of  the  Board 
of  Trade,  Sir  H.  G.  Calcraft,  broke  the  effect  of  the 
testimony  of  the  scientists,  engineers,  and  capital- 
ists, and  persuaded  the  Salisbury  Government  that 
it  was  useless  to  attempt  to  carry  in  the  House  of 
Commons  an  amendment  to  the  disastrous  Electric 
Lighting  Act,  1882,  that  would  be  satisfactory  to  the 
capitalists. 

Mr.  E.  O.  Smith,  Town  Clerk  of  Birmingham 
since  1881,  appeared  in  the  double  capacity  of  rep- 
resentative of  the  corporation  of  Birmingham  and 
representative  of  the  Association  of  Municipal  Cor- 
porations. He  protested  against  the  Bills  of  Lord 
Rayleigh  and  the  Earl  of  Camperdown,  but  was  will- 
ing "for  purpose  of  conciliation"  to  accept  thirty 
years  as  the  life  of  a  charter.  He  also  consented 
"unwillingly"  to  the  Board  of  Trade  having  power 
to  overrule  the  veto  of  the  local  authority  upon  a 
company's  application  for  a  charter.  He  said: 
"All  we  ask  is  this;  we  have  been  burnt  in  gas  and 
water ;  we  do  not  want  to  be  burnt  again  in  electricity. 
That  is  the  sum  and  substance  of  the  evidence  I  can 
give  on  behalf  of  the  corporations"  (municipalities). 
Lord  Rayleigh  asked  him  whether  this  was  his  idea 
of  being  burnt:   to  reduce  the  price   of  gas   from 


BACK   TO   THE   DARK   AGES  213 

74  cents  per  iooo  cubic  feet  in  1875  to  52  cents  in 
1885,  to  pay  interest  and  sinking  fund  payments  on 
an  investment  of  $10,000,000,  and  to  have  left  a 
profit  of  $125,000  a  year.  Mr.  Smith  replied:  "It 
was  a  good  bargain  for  the  corporation,  but  it  might 
have  been  a  great  deal  better."  Lord  Bramwell* 
queried :  "That  is  to  say,  you  would  like  the  electric 
light  companies  to  risk  their  money  upon  terms,  that 
if  it  is  a  failure,  it  shall  be  their  risk,  but  if  it  is  a 
success,  it  shall  be  at  your  profit?"  The  witness 
replied  that  the  statement  was  very  broad  and  not 
true,  for,  "assuming  the  companies  do  not  commence 
operations  until  electrical  science  has  developed 
rather  more,  I  conceive  under  the  terms  of  the 
Government  Bill,  it  is  possible  they  may  make  a 
very  good  profit,  and  get  all  their  money  back  at  the 
end  of  the  time.  ...  I  preface  my  answer  by 
saying,  if  they  waited  till  the  proper  time.  I  do  not 
think  at  present  f  there  is  scope  for  a  company.  .  .  . 
I  think  electrical  science  is  not  sufficiently  advanced 
for  people  to  venture  their  money  in  electrical  specu- 
lations. ...  I  should  not  put  my  money  into  it, 
but  I  do  not  see  any  necessity  for  people  to  put 
money   into  a  thing  unless  it  will  pay."     "Yes,  if 

*  Baron  of  the  Exchequer  from  1856  to  1876;  appointed  a  Lord 
Justice  of  Appeal  in  1876,  and  retired  from  the  bench  in  1881.  Was 
made  Baron  Bramwell  of  Hever,  in  1882.  "  Every  good  man  has  been 
at  some  time  of  his  life  a  socialist,  and,  if  wise,  very  soon  ceased  to  be 
one,"  he  often  said.     The   Times  Biographies,  Vol.   IV. 

t  At  the  close  of  1885,  there  were  in  operation  in  the  United  States 
167  central  electric  stations. 


214    MUNICIPAL   OWNERSHIP   IN  GREAT   BRITAIN 

they  were  not  in  too  great  a  hurry  to  begin,"  was 
the  reply  to  Lord  BramwelPs  repeated  query:  "You 
say  that  you  think,  provided  the  companies  waited 
a  few  years  until  electricity  was  rather  further  de- 
veloped, they  would  have  a  fair  chance  of  making 
a  fair  return  on  their  money  under  the  Government 
Bill?"  In  replies  such  as  these  the  Town  Clerk 
of  Birmingham  and  Representative  of  the  Associa- 
tion of  Municipalities  sought  refuge,  when  pressed 
to  state  how  electrical  engineering  could  advance 
without  practical  experience. 

Sir  George  Morrison,  Town  Clerk  of  Leeds  and 
Representative  of  171  Municipalities,  was  asked 
whether  the  sliding  scale  and  auction  clauses  in 
Lord  Rayleigh's  Bill  would  not  sufficiently  protect 
the  consumer.  He  replied:  "That  is  not  my  ob- 
jection to  the  Bill.  I  do  not  doubt  but  that  the 
sliding  scale  would  be  all  right,  other  things  being 
upon  the  footing  I  desire,  namely,  the  Purchase 
Clause."  The  Chairman  queried:  "In  your  evi- 
dence you  have  assumed  throughout  that  the  terms 
offered  by  the  Government  Bill  are  sufficiently  good 
to  enable  capital  to  be  found ;  that  is  your  opinion  ?" 
The  witness  replied:  "I  have  not  quite  put  it  as 
high  as  that ;  with  deference,  I  put  it  that  as  soon  as 
ever  electric  lighting  gets  into  a  condition  to  be 
workable  in  towns  (in  competition  with  gas),  those 
terms  are  sufficient.  ...  I  do  not  think  the  public 
generally  would   advance   their  capital   to  electric 


BACK   TO  THE   DARK   AGES  215 

light  concerns  unless  they  were  pretty  sure  it  would 
cut  out  gas  as  an  illuminant,  ...  I  think  they  would 
require  to  be  shown  that  as  an  illuminant  the  price 
would  not  be  materially  greater  than  that  of  gas; 
I  should  require  it  certainly."  To  the  query:  "I 
understood  you  to  say  that,  supposing  electricity 
were  able  to  compete  with  gas,  you  are  of  opinion 
that  there  would  be  no  difficulty  in  securing  capital 
to  forward  electric  lighting  undertakings,"  Sir  George 
Morrison  replied:  "I  should  think  not;  and  more- 
over, there  would  not  be  the  necessity  in  many  cases 
(of  inducing  capital  to  take  it  up),  because  large 
corporations  (municipalities)  would  themselves  im- 
mediately take  it  up." 

Sir  George  Morrison  capped  the  climax  by 
stating  that  there  was  no  necessity  of  putting 
the  electric  light  on  a  footing  of  equality  with 
gas,  as  Lord  Rayleigh's  Bill  proposed  to  do.  The 
city  of  Leeds,  on  the  "very  confident"  advice  of 
its  engineer,  had  found  a  substitute  for  electrical 
energy,  namely,  compressed  air  and  hydraulic 
power.  The  city  was  negotiating  with  two  com- 
panies that  were  going  to  apply  for  charters  to  install 
compressed  air  and  hydraulic  power  plants,  and  were 
ready  to  agree  to  sell  to  the  city  at  the  expiration  of 
thirty  years  on  the  basis  of  structural  value.  As 
soon  as  the  compressed  air  and  hydraulic  power 
were  available,  there  would  be  no  further  need  of 
electric  light  companies,  "Because  each  householder 


216    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

may  install  his  own  dynamo  in  his  own  house,  and, 
assuming  (the  compressed  air  and  hydraulic)  power 
to  be  laid  on,  he  may  use  the  system  and  machinery 
for  lighting  purposes  in  the  night,  which  machinery 
and  system  may  also  be  used  a  second  time  for  his 
ordinary  manufacturing  business  during  the  day. 
Under  the  compressed  air  and  hydraulic  power 
bills  there  is  a  very  strong  argument  to  be  adduced 
to  the  effect  that  there  is  no  necessity  to  give  electric 
lighting  companies  such  a  position  as  is  now  sought, 
when  the  compressed  air  and  hydraulic  power 
companies  will  do  half  the  work  (lighting)  at  a  much 
less  cost.  That  is  a  matter  of  opinion,  but  our 
engineer  has  advised  the  lighting  committee  of  the 
corporation  very  confidently.  We  are  supporting 
the  Bills,  having  the  view  that  compressed  air  will 
be  a  most  valuable  and  potent  factor  in  the  supply 
of  power."*  In  1902,  Leeds  had  437,000  inhab- 
itants. 

Mr.  C.  Dunscombe,  City  Engineer  of  Liverpool, 
supported  the  opposition  to  Lord  Rayleigh's  Bill 
and  the  Earl  of  Camperdown's  Bill  with  the  argu- 
ment :  "  I  do  not  think  any  electric  lighting  companies 
are  paying  a  dividend  at  present,  but  such  under- 
takings ought  not  to  be  embarked  upon  if  there  is 
not  a  reasonable  possibility  of  the  companies  paying 
a  small  rate  of  interest  upon  the  invested  capital  in 

*  Report  of  Lords  Committee  on  the  Electric  Lighting  Act,  1882, 
Amendment  BUls,  1886;  q.  1847,  1631,  1887,  1697,  1698,  1694,  1882  to 
1839,  1667  to  1683,  1872  to  1875,  and  1652  to  1657. 


BACK   TO   THE   DARK   AGES  217 

the  first  few  years  of  their  life."  At  the  conclusion 
of  the  evidence,  Lord  Ashford  said  to  the  witness: 
"I  was  going  to  ask  you  some  engineering  questions 
based  upon  your  answers;  but  I  have  elicited  from 
you  that  your  answer  to  the  Chairman  was  really 
in  nature  of  a  guess,  and  not  founded  upon  a  mathe- 
matical calculation,  therefore  I  cannot  pursue  that."  * 
Mr.  George  Whiteley  appeared  as  the  representa- 
tive of  Blackburn,  of  which  town  he  had  been  the 
Mayor  in  1885,  and  was  an  alderman  in  1886.  He 
said  Blackburn  was  the  chief  manufacturing  and 
chief  weaving  centre  of  cotton  textile  fabrics  in  the 
world.  He  was  himself  a  cotton  spinner  and  weaver, 
and  he  stated  that  an  electric  light  practicable  as  to 
price  would  be  a  great  boon  to  the  cotton  industries. 
He  argued  that  if  an  electric  light  company  could  not 
recover  its  capital  in  eighteen  years  by  setting  aside 
each  year  a  sinking  fund  contribution  to  be  invested 
at  3.5  per  cent  compound  interest,  "that  is  an  argu- 
ment why  it  should  not  be  formed  or  worked."  In 
reply  to  the  argument  that  the  electrical  engineers 
could  not  develop  their  science  if  they  were  denied 
the  opportunity  to  acquire  experience,  Mr.  Whiteley 
said  he  objected  to  an  electric  light  company  being 
given  power  to  break  up  the  streets  for  the  purpose 
of  laying  its  wires,  on  the  ground  that  the  light  was 
a  luxury.      The   corporation   of   Blackburn   would 

*  Report  of  Lords  Committee  on    the  Electric  Lighting  Act,   1882, 
Amendment  Bills,  1886;  q.  1485  and  15 11. 


218    MUNICIPAL  OWNERSHIP   IN  GREAT   BRITAIN 

not  put  in  an  electric  light  plant  until  the  light  were 
"a  benefit  to  the  inhabitants"  (at  large)  and  then 
the  damage  done  to  the  streets  would  be  compensated 
by  the  benefit  accruing  to  the  community  from  the 
electric  light.*  To  this  doctrine  that  the  streets 
should  not  be  utilized  for  the  purpose  of  affording 
companies  experience,  subscribed  also  Sir  George 
Morrison.  Since  1893,  Mr.  Whiteley  has  been  a 
member  of  Parliament.  Blackburn  in  1902  had 
129,000  inhabitants.  The  corporation  of  Blackburn 
obtained  an  electric  lighting  charter  in  1890  and, 
after  sitting  on  it  for  four  years,  began  to  supply 
current  in  February,   1895. 

Let  us  conclude  the  consideration  of  the  testimony 
on  behalf  of  the  municipalities  with  the  evidence  of 
Sir  H.  G.  Calcraft,  Permanent  Secretary  of  the 
Progress  not  Board  of  Trade  from  1886  to  1893. 
•worth  its  Cost  Sir  H.  G.  Calcraft  argued  in  favor  of 
compulsory  sale  at  structural  value,  on  the  ground 
"that  all  experience  will  show  that  when  companies 
have  to  be  bought  up  as  a  going  concern,  the  sum  of 
money  to  be  paid  to  them  is  very  large  indeed,  and 
the  public  is  put  to  unnecessary  expense."  In  reply 
to  the  question  of  Lord  Ashford  whether  it  was  un- 
just that  a  company  should  reap  the  benefit  of  suc- 
cess in  case  it  went  into  a  venture  upon  which  the 
municipality  did  not  care  to  embark,  because  of  the 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amend- 
ment Bills,  1886;   1528  to  1540. 


BACK   TO   THE  DARK   AGES  219 

uncertainty  of  the  venture,  the  Secretary  of  the  Board 
of  Trade  said,  "I  think  if  it  is  the  case  that  it  is  very 
doubtful  whether  the  thing  will  turn  out  very  well  or 
moderately  well,  and  then  it  turns  out  better  than  is 
anticipated,  the  public  ought  to  have  the  advantage" 
(benefit  of  the  doubt).  In  reply  to  the  query,  "That 
is  to  say,  that  the  undertakers  ought  to  run  the  risk  of 
failure,  and  the  public  ought  to  have  the  benefit  of  suc- 
cess?" the  Secretary  of  the  Board  of  Trade  replied, 
"  It  is  not  necessary  for  the  undertakers  to  take  it  up." 
Lord  Rayleigh  queried,  "When  you  say  it  is  not 
necessary  for  the  undertaker  to  take  it  up,  you  mean 
that  it  is  not  necessary  that  the  public  should  have 
the  electric  light."  The  reply  was,  "The  local 
authority  may  take  it  up."  Lord  Rayleigh  contin- 
ued, "Supposing  the  local  authorities  do  not  see  their 
way  to  taking  it  up,  what  then?"  The  reply  came, 
"Then  I  suppose  it  would  be  postponed  for  a  period." 
Lord  Rayleigh,  "The  whole  of  your  argument  seems 
to  come  to  this:  that  it  is  less  important  that  the 
public  should  have  the  light,  than  that  the  companies 
should  not  make  the  profits?"  The  Secretary  of 
Great  Britain's  Board  of  Trade,  "I  think  it  is  essen- 
tial that  the  public  should  not  pay  too  highly  for  it" 
(the  plant).* 

The  testimony  given  before  the  Select  Committee 
showed   that   the   municipalities  would   consent   to 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amend- 
ment Bills,  1886;   q.  2207  and  2280  to  2303. 


220     MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

nothing  more  than  the  extension  of  the  life  of  fran- 
chises to  thirty  years,  and  that  capitalists  would  not 
take  up  electric  lighting  on  that  basis.  Therefore, 
the  Government  abandoned  the  effort  to  amend  the 
Electric  Lighting  Act,  1882.  Rather  than  ask  its 
supporters  in  the  House  of  Commons  to  offend 
the  powerful  association  of  Municipal  Corporations, 
the  Government  concluded  to  let  the  people  of  the 
United  Kingdom  go  without  the  electric  light.  In 
1887  and  1888  the  Board  of  Trade  issued  no  Provi- 
sional Orders  or  charters.  In  the  last-mentioned  year 
Lord  Herschel,  who  had  been  a  member  of  the  Gov- 
ernment responsible  for  the  Act  of  1882,  felt  justi- 
fied in  saying  in  the  House  of  Lords,  "He  believed 
that  in  the  South  Sea  Islands  the  electric  light  was 
more  used  than  it  was  in  London." 


CHAPTER  XIV 

THE  CITIES  CONFESS  THEIR  INCOMPETENCE  TO  TAKE 
HOLD  OF  A  NEW  INDUSTRY 

In  1882,  a  Committee  of  the  city  of  Birmingham 
reported  against  the  corporation  undertaking  to 
supply  electric  current  for  lighting  purposes,  on 
the  ground  that  the  corporation  was  not  capable 
of  taking  up  an  unestablished  industry;  and  the 
corporation  indorsed  the  report  of  its  sub-com- 
mittee. The  report  in  question  is  one  of  the  most 
important  and  illuminating  documents  in  the  history 
of  municipal  ownership  in  Great  Britain,  wherefore 
it  is  here  reproduced  at  length,  from  the  Journal 
0}  Gas  Lighting,  Water  Supply,  and  Sanitary  Im- 
provements* 

The  Committee  reports:  "They  do  not  think 
that  the  interests  of  the  (municipal)  gas  supply,  as 
the  principal  lighting  agent,  are  threatened  by  the 
Report  of  Bir-  proposed  new  illuminant.  If  these 
mingham  Com-  interests  were  so  threatened,  the 
mittee  of  1882  Committee,  while  they  would  recog- 
nize the  seriousness  of  the  situation,  believe  that 
it  would  be  their  duty,  on  the   one  hand,  to  con- 

*  Vol.  XL,  1882,  p.  788. 
221 


222    MUNICIPAL   OWNERSHIP   IN   GREAT  BRITAIN 

sider  the  question  of  electric  supply  and  to  promote 
the  supply,  with  a  sole  regard  to  the  general  con- 
venience of  the  inhabitants  of  the  town ;  and,  on  the 
other  hand,  to  continue  to  develop  in  every  possible 
way  the  new  fields  for  the  employment  of  gas  which 
are  every  day  presenting  themselves,  and  to  per- 
severe boldly  in  any  expenditure  that  will  cheapen 
its  production.  .  .  . 

"Further,  the  new  system,  if  successful,  will  be 
of  immense  importance  to  the  manufactures  in 
which  Birmingham  and  the  district  are  particularly 
interested;  and  for  this  reason  alone,  the  town  will 
probably  be  anxious  that  facilities  should  be  af- 
forded for  the  experiment,  provided  that  the  incon- 
veniences (due  to  laying  wires  under  the  street 
surface)  attending  it  can  be  minimized  to  the  fullest 
possible  extent. 

"The  Electric  Lighting  Act,  1882,  has  been 
passed  with  the  special  view  of  preventing  the 
establishment  of  a  monopoly.  More  than  one 
undertaking  may  be  authorized  in  the  same  area; 
and  it  should  not  be  overlooked  that  if  the  system 
proves  successful  in  a  limited  area  (to  which  the 
corporation  proposes  to  confine  a  company),  the 
corporation  may  apply  for  powers  to  supply  in  such 
area  (in  competition  with  the  company)  or  in  the 
remainder  of  the  Borough.  A  license  can  only  be 
granted  (by  the  Board  of  Trade)  with  the  consent 
of  the  Local   Authority,  and   for  seven   years.     It 


THE   INCOMPETENCE   OF   THE   CITIES  223 

cannot  be  renewed  without  the  consent  of  the  Local 
Authority.  A  Provisional  Order  granted  to  a 
private  company  may  be  terminated  by  purchase 
of  the  electric  plant,  on  favorable  terms,  by  the  local 
authority  at  the  end  of  twenty-one  years,  or  such 
shorter  terms  as  Parliament  may  impose,  or  as  may 
be  arranged  by  agreement. 

"The  most  sanguine  supporter  of  electric  lighting 
does  not  claim  that  the  proposed  system  of  distribu- 
tion (of  electric  energy)  would  be  free  —  at  any 
rate  for  some  time  to  come  —  from  difficulties,  im- 
perfections, or  even  failures.  These  would  cer- 
tainly be  attributed  (if  they  occurred  in  a  municipal 
plant)  by  rival  companies  either  to  the  use  by  the 
consumers  of  the  wrong  lamp,  or  to  the  use  by  the 
undertakers  (the  municipality)  of  the  wrong  dynamo. 
It  is  conceivable  that,  the  supply  being  in  the  hands 
of  a  local  authority,  with  generating  plant  recently 
put  down,  consumers  who  had  purchased  costly 
fittings,  and  who  were  impatient  under  imperfections 
or  difficulties  which  had  manifested  themselves  in 
this  experimental  work,  would  demand  that  the 
dynamo  in  use  should  be  abandoned  in  favor  of  some 
other  form  which  for  the  moment  attracted  (the 
popular)  attention.  It  is  also  most  important  to 
remember  that  whatever  the  cost  of  supplying  elec- 
tricity is  found  to  be,  the  undertakers  will  be  sub- 
ject to  great  pressure  by  consumers  to  supply  it  at 
the  same  cost  (price)  as  gas,  or  at  least  at  prime  cost. 


224    MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

Local  authorities,  having  already  the  supply  of  gas 
in  their  hands,  will  have  additional  difficulties  in  this 
respect,  as,  even  if  supplying  electricity  at  prime 
cost,  they  will  be  suspected  especially  by  others 
seeking  powers  to  establish  a  rival  system,  or  by 
agents  eager  to  sell  lamps  —  of  unduly  keeping  up 
the  price  in  order  to  foster  the  gas  supply. 

"The  Town  Clerk  is  of  opinion  that  the  meaning 
of  section  19  of  the  Act  is  not  clear.  It  is,  therefore, 
necessary  to  point  out  that,  under  this  section,  it  may 
be  contended  that  the  undertakers  will  be  under  an 
obligation  to  supply  electricity  in  any  part  of  the 
selected  area.  In  that  event,  this  would  be  a  serious 
obligation ;  as  it  might,  and  probably  would,  involve 
the  laying  of  conductors  over  the  whole  area  for  a 
very  limited  consumption.  .  .  . 

"On  consideration  of  the  requirements,  it  is  ob- 
vious that  if  the  Council  decided  to  apply  for  powers, 
they  must  at  once  obtain  special  professional  help; 
that  it  would  be  necessary  to  rely  solely  on  that  help, 
and  to  accept  the  responsibility  of  taking  action  on 
technical  and  commercial  matters  involving  heavy 
responsibilities,  and  possibly  parliamentary  oppo- 
sition, without  experience  to  guide  them  or  their 
advisers  in  the  matter  (the  industry  being  not  yet 
established).  .  .  . 

"The  Committee  do  not  think  it  can  be  said  that 
electricity  is  at  present  a  public  necessity.  Dr. 
Siemens  (of  Siemens  Brothers  &  Co.)  has  said  that 


THE   INCOMPETENCE   OF   THE   CITIES  225 

electricity  is  the  light  of  luxury,  and  that  gas 
is,  and  will  be,  the  poor  man's  friend.  The  Com- 
mittee, not  differing  with  Dr.  Siemens,  quote 
his  authority  in  support  of  their  opinion;  and  are 
unable,  so  far  as  regards  this  reason,  to  recommend 
the  expenditure  of  any  portion  of  the  corporate 
funds  in  an  experiment  for  the  advantage  of  a  por- 
tion only  of  the  community.* 

"Your  Committee,  having  regard  to  the  difficul- 
ties and  grave  responsibilities  which,  in  the  pres- 
ent state  of  knowledge  on  the  subject,  appear  to 
be  inseparable  from  the  undertaking,  have  con- 
sidered whether  any  disadvantages  would  result  to 
the  town  if  the  support  of  the  corporation  is 
given  to  the  granting  of  authority  to  electric  light- 
ing companies  to  undertake  the  supply  (in  Bir- 
mingham). They  report,  after  careful  considera- 
tion of  the  subject,  that  it  does  not  appear  to  them 
that  the  rate-payers  will  be  in  any  way  prejudiced 
by  the  establishment  of  one  or  more  companies  in 
limited  areas  of  supply,  .  .  .  that  it  will  not  be  diffi- 
cult to  arrange  that  the  concession  shall  be  made 
for  a  moderate  term  (of  years). 

"  Reviewing  these  considerations,  the  Committee 
are  of  opinion  that  there  is  no  analogy  between 
the  proposal  that  the  Council  should  undertake  the 
supply  of  gas  and  that  they  should  undertake  that  of 

*  This  statement  is  consistent  with  the  opening  statement  that  it 
would  be  "  of  immense  importance  to  those  manufactures  in  which 
Birmingham  is  particularly  interested." 

Q 


226    MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

electricity,  and  that  in  most  important  particulars 
the  circumstances  are  wholly  different.  The  Coun- 
cil were  prepared  —  and,  indeed,  they  thought  it 
advisable  —  to  accept  largely  increased  responsi- 
bilities with  the  transfer  (purchase)  of  the  gas 
undertaking  (in  1875);  but  those  responsibilities 
were  chiefly  as  to  the  commercial  conduct  of  the 
(established)  business.  They  had  as  a  part  of  the 
transfer  a  trained  and  skilful  staff,  with  long  ex- 
perience of  the  business,  on  whom  they  could  rely. 
Their  first  responsibility  with  regard  to  the  supply 
of  electricity  would  be  the  selection  of  an  untried 
staff,  chosen  of  necessity  from  men  without  experi- 
ence of  the  obligations  to  be  incurred,  and  for  whose 
mistakes  the  corporation  would  be  blamable.  With 
the  transfer  of  the  gas  supply,  profits  over  and  above 
those  possible  to  the  companies  were  at  the  disposal 
of  the  corporation.*  The  result  of  an  undertaking 
to  supply  electricity  would  almost  certainly  impose 
an  immediate  burden  on  the  rate-payers,  with  the 
ultimate  prospect  of  a  considerable  loss.  It  is  known 
that  the  principal  difficulties  of  the  proposed  system 
lie  in  the  distribution  of  electricity  (without  undue 
loss).  Apart  from  cost,  the  difficulties  of  the  genera- 
tion of  electricity  and  the  construction  of  lamps  may 
be  said  to  have  been  overcome.     A  local  authority 

*  The  argument  is  that  corporations  can  work  more  cheaply  than 
companies  because  they  save  the  salaries  of  president,  directors,  etc., 
and  because  municipalities  can  borrow  money  at  lower  rates  of  interest 
than  companies  can  borrow. 


THE   INCOMPETENCE   OF  THE   CITIES  227 

undertaking  the  supply  of  electricity,  under  the  most 
favorable  circumstances,  would  have  on  its  hands 
the  costly  and  difficult  part  of  the  supply  (namely, 
the  distribution  from  the  plant  to  the  consumer). 
It  would,  however,  be  serving  the  interests  of  com- 
panies *  whose  profits  are  made  by  royalties  on,  or 
the  manufacture  of,  dynamos,  plant,  and  lamps,  who 
would  be  able  to  attribute  all  the  imperfections  and 
failures  of  the  system  to  the  source  of  supply,  and 
to  whose  interest  it  would  be  to  foster  a  continual 
agitation  for  cheaper  electricity. 

"The  Committee  believe  that  no  sufficient  reason 
can  be  shown  to  induce  the  corporation  to  enter  on  a 
work  which  cannot  fail  to  bring  it  anxieties,  difficul- 
ties, and  arduous  labors,  without  the  recompense 
of  contributing  to  the  welfare  of  the  community  as  a 
whole;  and  which  would  involve  financial  respon- 
sibilities, with  the  uncertainty  of  adequate,  if  any, 
return.  If,  on  the  other  hand,  the  companies  are 
allowed  to  take  the  management  of  the  supply,  they 
will  undertake  the  responsibilities  and  difficulties 
appertaining  to  it.  At  the  end  of  the  term  which  is 
agreed  upon,  or  which  Parliament  determines  as 
sufficient  compensation  to  the  company,  the  corpora- 
tion will  have  the  same  opportunity,  but  on  more 
favorable  terms,  of  acquiring  the  property,  and  will, 
if  it  has  become  profitable,  have  the  same  induce- 

*  The  words  of  the  town  councillors  of  one  of  the  greatest  trading  and 
manufacturing  cities  in  the  world. 


228    MUNICIPAL   OWNERSHIP   IN   GREAT  BRITAIN 

ment,  in  the  saving  of  interest  on  capital  employed, 
as  it  had  when  it  purchased  the  gas  undertaking. 
The  Committee  believe,  however,  that  gas,  when 
properly  used,  will  hold  its  own  as  the  most  effective 
and  reliable  illuminant,  and  that  it  is  possible  to 
free  it  from  much  of  the  opposition  to  which  it  is 
now  liable,  by  showing  on  every  opportunity  that  the 
objections  urged  against  it  are  not  inseparable  from 
its  use."  * 

A  more  detailed  and  emphatic  confession  of  utter 
incapacity  of  a  municipality  to  take  hold  of  and 
build  up  a  new  industry  one  cannot  imagine.     Nor 

The  Value  of  can  one  imagme  a  more  brazen  and 
Experiment  and  shameless  attitude  of  mind  than  was 
Experience  that   of    the   auth0rs    of  this    docu- 

ment, full  of  slurs  against  private  enterprise,  yet 
proposing  to  use  that  private  enterprise  for  the  per- 
formance of  a  task  for  which  the  authors  of  the  docu- 
ment said  they  had  neither  stomach  nor  capacity. 
Mr.  E.  O.  Smith  became  Town  Clerk  of  Birmingham 
in  1 88 1 ;  he  knew  this  document  as  well  as  the 
schoolboy  knows  his  reader;  and  yet,  in  1886,  he 
argued  before  the  Committee  of  the  House  of  Lords 
that  Birmingham  was  " burnt"  when  it  was  made  to 
pay  the  market  price  for  an  established  gas  plant, 
with  an  established  clientelage,  and  a  trained  staff 
familiar  with  the  engineering  science  of  gas  manu- 

*  Many  wealthy  English  families  never  have  admitted  gas  into  their 
houses,  on  the  ground  that  it  injures  the  health  and  destroys  fabrics  and 
impairs  paintings. 


THE   INCOMPETENCE   OF  THE   CITIES  229 

facture  and  supply  —  a  science  built  up  by  men  who 
shirked  neither  "  anxieties,  difficulties,  and  arduous 
labors,"  nor  the  risk  of  losses  through  ill-fated  ex- 
periments. Sir  H.  G.  Calcraft,  Permanent  Secre- 
tary of  the  Board  of  Trade  from  1886  to  1893,  also 
must  have  been  familiar  with  this  document,  as  well 
as  with  the  fact  that,  broadly  speaking,  the  munici- 
palities had  originated  nothing  in  water  supply, 
gas  supply,  or  street  railways.  And  yet,  in  1886, 
he  argued  that  municipalities  were  put  to  "unnec- 
essary" expense  when  made  to  remunerate  private 
companies  for  having  built  up  an  industry.  It 
should  have  been  obvious  to  the  Permanent  Secre- 
tary of  Great  Britain's  Board  of  Trade  that  if 
municipalities  cannot  develop  industries,  and  pri- 
vate enterprise  will  not  develop  them  unless  it  can 
obtain  its  price  for  such  work  of  development,  then 
that  price  is  as  much  a  part  of  the  necessary  cost 
of  an  established  industry  as  are  the  stone,  brick, 
mortar,  iron,  and  steel  that  go  into  the  plant. 

Shortly  after  the  enactment  of  the  Electric  Light- 
ing Act,  1882,  five  or  six  companies*  served  notice 
upon  the  Birmingham  Town  Council  that  they  had 
applied  to  the  Board  of  Trade  for  Provisional  Orders 
for  the  area  of  Birmingham,  some  of  the  companies 
intending  to  supply  current  over  the  whole  of  Bir- 

*  Report  of  Lords  Committee  on  the  Electric  Lighting  Act,  1882, 
Amendment  Bills,  1886;  q.  1223,  1162,  1250  and  1251,  Mr.  E.  O.  Smith, 
Town  Clerk  of  Birmingham. 


230    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

mingham.  All  of  the  applications  excepting  that 
of  the  Incandescent  Electric  Lighting  Co.,  Ltd., 
were  subsequently  withdrawn.  The  corporation 
agreed  with  Messrs.  Crompton  and  Winfield, 
electrical  engineers  and  contractors  who  constituted 
the  Incandescent  Electric  Lighting  Co.,  not  to  op- 
pose before  the  Board  of  Trade  that  company's 
application  for  a  charter,  if  the  company  would 
agree  to  sell  its  plant  at  the  end  of  sixteen  years  on 
the  basis  of  "profits  up  to  date,"  but  with  no  allow- 
ance for  future  profits.  The  company  agreed  also  to 
confine  its  operations  to  the  "very  centre"  of  Bir- 
mingham. The  city  insisted  upon  that  restriction 
because  it  wanted  a  company  only  sufficiently  large  to 
prove  that  the  electric  light  could  compete  with  gas. 
It  was  opposed  to  having  any  larger  company,  for  the 
larger  and  the  more  successful  the  company  should 
be,  the  more  the  city  would  have  to  pay  for  its  plant 
and  good-will  at  the  end  of  sixteen  years*  Messrs. 
Crompton  and  Winfield  were  unable  to  raise  money, 
and  in  1886  the  Board  of  Trade,  upon  the  applica- 
tion of  the  city  of  Birmingham,  revoked  their  charter. 
Thereupon,  Messrs.  Crompton  and  Winfield  ap- 
plied to  Parliament  for  a  Private  Act  on  the  terms 
of  the  Private  Acts  given  to  gas  companies.  But 
the  Board  of  Trade  opposed  the  application  on 
the  ground   of  violation   of  the   spirit  of  the  Act 

*  Report  from  the  Select  Committee  on  Municipal   Trading,   1900; 
q.  1957,  Mr.  E.  O.  Smith,  Town  Clerk  of  Birmingham. 


THE   INCOMPETENCE   OF   THE   CITIES  231 

of  1882,  and  Messrs.  Crompton  and  Winfield 
withdrew.* 

In  1889,  after  the  life  of  electric  lighting  charters 
had  been  extended  to  forty-two  years,  the  Birming- 
ham Electric  Light  and  Power  Co.  applied  to  the 
Board  of  Trade  for  a  charter  for  the  whole  of  the  city. 
The  corporation  of  Birmingham  still  was  afraid  to 
embark  in  electric  lighting, f  though  there  were  at 
this  time  in  operation  in  the  United  States  about 
675  central  electric  stations.  The  corporation  agreed 
not  to  oppose  before  the  Board  of  Trade  the  com- 
pany's application  for  a  charter,  if  the  company  would 
consent  to  the  Board  of  Trade  restricting  its  charter 
to  a  very  small  area  in  the  centre  of  the  city,!  and 
would  also  give  the  city  the  option  to  purchase  the 
plant  after  a  short  period. 

The  company  began  to  supply  electricity  in  April, 
1 89 1,  and  "as  soon  as  it  proved  to  the  corporation 
that  it  was  doing  very  well,"  §  the  corporation  bought 
it  out,  paying  it  $2,100,000  for  an  investment  of 
$1,095,000.     The   plant  was  transferred  to  the  city 

*  Report  of  Lords  Committee  on  the  Electric  Lighting  Act,  1882, 
Amendment  Bills,  1886;  q.  1162,  Mr.  E.  O.  Smith;  and  q.  282,  292,  293, 
33°.  347.  348,  349.  and  358,  Mr.  R.  E.  Crompton. 

f  Report  from  the  Select  Committee  on  Municipal  Trading,  1900; 
q.  1957,  Mr.  E.  O.  Smith,  Town  Clerk  of  Birmingham. 

%  Report  by  the  Board  of  Trade,  respecting  the  Applications  to  and 
Proceedings  of  the  Board  of  Trade  under  the  Electric  Lighting  Acts,  for 
the  year  1889,  says  that  "the  application  for  the  Birmingham  Order 
originally  included  the  whole  city.  The  area  in  the  Order  as  granted 
was,  however,  restricted  to  a  district  in  the  centre  of  the  city,  at  the  re- 
quest of  the  local  authority." 

§  Report  from  the  Select  Committee  on  Municipal  Trading,  1900; 
q.  1957,  Mr.  E.  O.  Smith. 


232    MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

in  January,  1900,  and  thereupon  the  city  took  steps 
to  supply  current  to  the  whole  city.  Thus  the  city 
of  Birmingham  for  fully  eighteen  years  prevented  the 
people  outside  of  the  "very  centre"  of  the  city  from 
having  the  electric  light;  and  after  having  inflicted 
that  hardship,  it  ended  up  with  paying  $2,100,000 
for  a  plant  that  had  cost  $1,095,000  —  the  very  thing 
it  had  sought  to  avoid. 

In  1903  there  were  in  Birmingham,  a  city  of 
552,000  people,  only  2135  customers  of  the  electric 
light  plant.  That  is,  in  every  259  inhabitants  was 
an  electric  light  customer,  using,  on  an  average,  47 
lamps  of  16  candle-power*  In  Boston  proper,  a  city 
of  about  the  same  size  as  Birmingham,  1  in  every  73 
inhabitants  was  an  electric  light  customer  in  1900, 
using,  on  an  average,  49  lamps  of  16  candle-power. 

LIVERPOOL 

In  1879  to  1882  Liverpool,  Blackpool,  Over 
Darwen,  Hull,  Lancaster,  Oldham,  and  Irvine 
Burgh  obtained  Acts  of  Parliament  authorizing  the 
local  authorities  to  instal  plants  for  lighting  the 
streets  electrically,  f  All  of  the  cities  failed  to 
achieve  their  purpose,  except  Blackpool,  which 
lighted  the  streets  electrically  from  1884  on,  but  did 

*  Garcke's  Manual  of  Electrical  Undertakings,  1Q04. 

t  Report  of  Committee  on  the  Electric  Lighting  Bill,  1882;  q.  23  to  25, 
Mr.  T.  H.  Farrer,  Permanent  Secretary  to  the  Board  of  Trade;  q.  1254 
and  15 15,  Mr.  J.  Raynor,  Town  Clerk  of  Liverpool;  and  q.  2470,  Mr. 
C.  W.  Siemens. 


THE   INCOMPETENCE   OF  THE  CITIES  233 

not  supply  current  to  private  consumers  until  1893.* 
After  the  city  of  Liverpool  had  failed,  it  made  con- 
tracts, in  1880  and  1882,  with  private  companies  for 
lighting  the  streets,  but  the  companies  "failed  finan- 
cially." f 

Liverpool  had  nothing  further  to  do  with  electric 
lighting  until  1889,  when  it  consented  to  the  Board 
of  Trade  issuing  a  Provisional  Order  to  the  Liver- 
pool Electric  Supply  Co.,  Ltd.,  under  the  con- 
ditions described  as  follows  by  Sir  T.  Hughes, 
Alderman  of  Liverpool  since  1878,  Mayor  in  1889, 
and  Lord  Mayor  in  1897.  "The  Liverpool  Electric 
Supply  Co.  got  their  Act  with  the  good-will 
of  the  corporation,  the  corporation  taking  care  to 
protect  themselves  by  getting  power  to  buy  out  the 
company  within  seven  years.  The  corporation 
felt  at  that  time  that  electric  light  was  in  a  sort  of 
experimental  stage  which  would  not  warrant  the 
corporation  in  embarking  the  capital  of  the  tax- 
payers in  the  undertaking.  But  the  company  were 
willing  to  take  all  the  risk,  and,  therefore,  with  the 
good-will  of  the  corporation,  they  got  their  Act,  the 
corporation  taking  care  that  if  it  did  turn  out  a 
success  within  seven  years,  they  should  have  the 
option  of  taking  it  within  that  time."  J     In  1896 

*  Report  from  Select  Committee  on  Municipal  Trading,  1900;  3831, 
G.  C.  Kingsbury,  Mayor  of  Blackpool. 

f  Report  of  Lords  Committee  on  the  Electric  Lighting  Act,  1882, 
Amendment  Bills,  1886;  q.  1464,  Mr.  C.  Dunscombe,  City  Engineer  of 
Liverpool. 

%  Report  from  the  Select  Committee  on  Municipal  Trading,  1900; 
q.  2204  and  2174. 


234    MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

the  city  paid  the  company  $2,000,000  for  a  plant  that 
had  cost  $1,250,000.  In  the  words  of  Sir  T.  Hughes: 
"The  corporation  felt  the  company  had  been  an 
enterprising  company  and  had  developed  the  thing 
very  well,  and  that  therefore  they  were  entitled  to  a 
fair  profit  on  the  capital  which  they  had  risked  on 
what  was  at  one  time  somewhat  of  a  speculation." 
Under  the  terms  of  the  bargain,  prudence  compelled 
the  company  to  confine  itself  to  a  restricted  area ;  it 
could  not  try  to  develop  business  that  required  time 
to  build  up.  In  1902,  six  years  after  the  city  had 
taken  over  the  plant,  there  were  in  Liverpool,  a 
city  of  702,000  inhabitants,  4790  electric  light  cus- 
tomers. One  inhabitant  in  every  146  inhabitants 
was  an  electric  light  customer,  using,  on  an  average, 
46  lamps  of  16  candle-power. 

MANCHESTER 

In  1889  six  companies  applied  for  charters  for 
Manchester.  In  order  to  keep  them  out,  the  city 
itself  obtained  a  charter  from  the  Board  of  Trade, 
in  1890.  In  1893,  the  city  began  the  supply  of  current 
in  an  area  of  four  square  miles  in  the  heart  of  the 
city.  In  1898  the  city  took  steps  to  supply  current 
in  the  remaining  sixteen  square  miles  of  the  city,  by 
preparing  to  enlarge  its  plant  from  20,000  horse- 
power to  1 20,000  horse-power.*    In  1900,  Mr.  J.  W. 

*  Report  of  Joint  Committee  on  Electricity  Generating  Stations  and 
Supply,  1898;  q.  1260  to  1 27 1,  Mr.  L.  Higjjinbottom,  Alderman  in 
Manchester  and  Chairman  of  Electricity  Committee. 


THE   INCOMPETENCE   OF  THE   CITIES 


235 


Southern,  who  had  been  an  alderman  in  Manchester 
since  1878,  stated  before  a  Parliamentary  Committee 
that  the  demand  for  current  was  in  excess  of  the 
city's  power  to  supply.  "We  have'  a  very  large 
number  of  persons  who  have  applied  to  be  connected 
as  soon  as  we  can  give  them  power."  Mr.  Southern 
added  that  the  demand  came  chiefly  from  small 
manufacturers  who  wished  to  install  three  and  four 
horse-power  motors.  The  extent  to  which  the  city 
was  preferring  the  public  treasury  to  the  needs  of 
the  small  manufacturers,  and  the  convenience  of  the 
householders,  is  indicated  by  the  fact  that  in  1898-99 
the  city  applied  $60,000  of  the  profits  made  by  the 
electric  light  department  to  the  relief  of  the  rates 
(taxes).*  In  1903,  one  inhabitant  in  every  84  in- 
habitants was  a  customer  of  electric  light,  using,  on 
the  average,  34  lamps  of  16  candle-power. 

SHEFFIELD 


From  1889  to  1891,  inclusive,  the  city  of  Sheffield 
kept  the  electric  light  companies  at  bay  by  opposing 
before  the  Board  of  Trade  the  applications  of  com- 


*  Report  from  the 
q.  2464  to  2466. 

Select  Committee  on  Municipal  Trading,    1900; 

Year 

Number   of 
Customers 

Year 

Number   of 
Customers 

1894 

1895 

1896 

1897 

412 

75* 
1 148 
1581 

1899 

I903 

1981 
2570 

3249 
6836 

236    MUNICIPAL   OWNERSHIP   IN   GREAT    BRITAIN 

panies  for  charters.  In  1892  it  admitted  the 
Sheffield  Electric  Light  and  Power  Co.,  Ltd., 
on  condition  that  the  company  should  sell  to  the 
city  at  an  early  date,  if  the  city  should  care  to  pur- 
chase. The  company  began  to  supply  current  in 
March,  1893;  and  in  December,  1898,  the  city 
bought  it  out,  paying  $218  for  every  $100  invested.* 

LEEDS 

Leeds,  which  in  1902  had  a  population  of  437,000, 
will  be  remembered  as  the  city  which  in  1886  came 
to  the  conclusion  that  public  necessity  and  con- 
venience did  not  demand  the  development  of  the 
science  of  electrical  engineering,  since  compressed 
air  and  hydraulic  power  were  going  to  enable  every 
householder  to  install  in  his  basement  his  own 
dynamo ! 

Leeds  kept  the  electric  lighting  companies  at  bay 
in  1889  and  1890,  and  in  1891  it  admitted  the 
Yorkshire  House-to-House  Electricity  Co.,  Ltd., 
on  condition  that  the  company  should  agree  to  sell 
within  a  few  years,  if  the  city  should  care  to  pur- 
chase. The  company  began  to  supply  in  May, 
1893;  and  in  December,  1898,  the  city  bought 
it  out.  For  the  company's  capital  expenditure, 
$1,087,100,  the  city  gave  the  company  $1,087,100 

*  Report  of  Joint  Committee  on  Electricity  Generating  Stations  and 
Supply,  1898;  q.  1536,  1605,  and  1607,  Mr.  G.  Franklin,  Lord  Mayor 
of  Sheffield. 


THE   INCOMPETENCE   OF   THE   CITIES 


237 


in  5  per  cent  stock  of  the  city  of  Leeds.  In  1902, 
one  inhabitant  in  every  175  was  a  customer  of  elec- 
tric light,  using,  on  the  average,  32  lamps  of  16 
candle-power.* 


NOTTINGHAM 


Nottingham,  which  in  1903  had  a  population  of 
240,000,  obtained  an  electric  light  charter  in  1890, 
in  order  to  keep  the  companies  out.  It  was  afraid 
to  install  a  plant,  and  therefore  it  proceeded  to  "sit 
on"  the  charter.  The  companies  continued  to 
apply  to  the  Board  of  Trade  for  charters,  pointing 
out  that  the  city  of  Nottingham  was  not  using  its 
powers.  In  order  to  stop  the  agitation  of  the  com- 
panies, the  city  supplied  current  in  September, 
1894.  "It  did  not  expect  it  to  pay,  but  started  in 
order  to  keep  out  a  company  that  was  applying."  f 
From  1894  to  1898,  inclusive,  the  city  made  no  effort 
to  develop  business.  In  1898  it  had  only  482  elec- 
tric light  customers.  $    The  city  owns  the  gas  plant. 

*  Garcke's  Manual  of  Electrical  Undertakings,  Vols.  IV  and  VIII. 

f  Report  of  Joint  Committee  on  Electricity  Generating  Stations  and 
Supply,  1898;  q.  1378,  1379,  and  1406,  Sir  Samuel  Johnson,  Town 
Clerk  of  Nottingham  since  1871. 

%  Garcke's  Manual  of  Electrical  Undertakings,  Vols.  Ill  to  VIII. 


Year 

Number  of 
Customers 

Year 

Number  of 
Customers 

1898 

1899 

482 
850 

1903 

"45 
2238 

238    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 
EDINBURGH 

The  corporation  of  Edinburgh  obtained  an  electric 
lighting  charter  in  1891,  but  it  did  not  supply  current 
until  April,  1895.  The  corporation  owned  the  gas 
plant.  Moreover,  "many  of  the  poorer  people 
looked  upon  the  acquisition  of  the  electric  lighting 
by  the  corporation  as  rather  a  hardship;  as  being 
more  in  the  nature  of  a  luxury  for  which  they  ought 
not  to  pay."  * 

GLASGOW 

In  1889  or  1890,  Messrs.  Muir,  Mavor,  and  Coul- 
son,  Limited,  a  so-called  "marauding"  company, 
applied  to  the  Board  of  Trade  for  an  electric  lighting 
charter.  The  Board  of  Trade  gave  the  charter  to 
the  corporation  of  Glasgow,  which  bought  the  plant 
of  Messrs.  Muir,  Mavor,  and  Coulson,  Limited,  in 
1892,  and  thereupon  began  the  supply  of  current. 

In  1900,  Mr.  James  Kelly,  a  Magistrate  for 
Glasgow,  stated  before  a  Parliamentary  Committee, 
"I  know  that  private  firms  have  put  in  their  own 
electric  power,  who  would  have  taken  it  from  the 
corporation,  if  it  had  been  available."  At  that 
time  the  corporation  had  only  fifty-six  miles  of  mains. 
At   the   same   time,    Mr.    Samuel   Chisholm,   Lord 

*  Evidence  taken  before  the  Telephones  Committee  on  the  Question 
of  Adequacy  of  Telephone  Service  in  Local  Areas,  1895 ;  q.  2282  and  2290, 
Mr.  A.  Reach,  Editor  of  "  The  Edinburgh  Evening  Dispatch." 


THE  INCOMPETENCE  OF   THE  CITIES  239 

Provost  of  Glasgow,  testified  as  follows:  "We  ob- 
tained powers  to  supply  electricity  within  the  city 
boundary  in  1890.  We  carried  it  on  without  any 
great  energy  for  some  years.  .  .  .  We  expect  to 
be  ready  this  winter  to  supply  practically  the  whole 
city  with  electricity."  The  Chairman  of  the  Com- 
mittee queried:  "You  account  for  your  failure  to 
push  electric  lighting  at  the  beginning  by  the  fact 
of  the  corporation  taking  more  interest  in  their 
largely  gas  undertaking?"  The  Lord  Provost  re- 
plied :  "  Yes,  I  think  that  was  really  the  explanation. 
There  was  the  natural  caution  also  which  the  cor- 
poration properly  felt  about  a  comparatively  new 
and  untried  enterprise,  which  in  1890  electric  light 
was  for  domestic  supply."  The  Chairman  replied: 
"It  has  been  stated  by  several  witnesses  that  in- 
dustrial progress  has  been  checked  by  allowing 
corporations  to  work  their  own  enterprises.  .  .  . 
Do  you  admit  that  that  has  been  so  to  some  extent, 
as  regards  your  electric  lighting;  it  appears  to  me 
that  in  answer  to  some  of  my  former  questions  you 
made  admissions  that  amounted  almost  to  that?" 

The  Lord  Provost's  ideas  concerning  the  part 
that  municipalities  are  to  play  in  the  work  of  build- 
ing up  new  industries  are  revealed  in  the  following 
statement :  "  As  a  matter  of  fact,  I  am  not  sure  but  that 
Glasgow  has  gained  ultimately  by  its  dilatoriness  at 
first,  because  during  these  years  when  we  were  lying 
fallow  and  doing  little,  there  were  various  improve- 


240    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

ments  that  were  made.  We  learn  from  other 
people's  experience;  we  had  deputations  visiting 
various  places  in  England  and  on  the  Continent,  and 
we  gained  experience  during  those  years,  and  when 
we  did  launch  out  to  a  larger  extent,  we  were  able 
to  do  it  to  greater  advantage  than  if  we  had  done  it 
first."  * 

*  Report  from  the  Select  Committee  on  Municipal  Trading,  1900; 
q.  2724  to  2735,  2808  and  2809. 


CHAPTER  XV 

THE  MUNICIPALITIES  versus  THE  CONSUMER 

After  the  electric  lighting  industry  had  been 
completely  paralyzed  in  Great  Britain  for  six  long 
years  —  so  far  as  the  supply  of  current  from  central 
stations  was  concerned  —  the  Association  of  Munici- 
pal Corporations  permitted  the  House  of  Commons 
to  pass  the  Salisbury  Government's  Electric  Light- 
ing Act,  1882,  Amendment  Bill,  1888  *  There  was 
no  debate  upon  the  Bill  in  the  House  of  Commons. 
In  the  House  of  Lords,  Lord  Thurlow  introduced  the 
Bill  with  the  words:  "The  object  of  the  Bill  was  to 
remove  what  had  proved  prohibitive  restrictions 
upon  an  industry  which  deserved  every  support.  .  .  . 
In  almost  every  large  town  in  Italy  electric  lighting 
was  making  rapid  progress.  It  was  only  in  England 
that  the  science  was  comparatively  at  a  stand-still."  f 
The  reader  will  remember,  however,  that  in  Ger- 
many also  the  industry  was  completely  paralyzed 
at  this  time. 

The  Act  of  1888  retained  the  principle  of  com- 
pulsory purchase  at  cost  of  replacement,  but  length  - 

*  51  and  52  Vict.,  c.  12,  June  28,  1888. 

t  Hansard's  Parliamentary  Debates,  March  5  and  12,  1888. 

R  241 


242     MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

ened  the  life  of  charters  to  be  given  to  companies  to 
Act  <?/"i888  aimed  forty-two  years,  or  such  shorter  period 
to  remove  Prohibi-  as  the  Board  of  Trade  might  fix.  It 
tive  Restrictions  ^x^zA,  also,  the  provision  that,  if  a 
local  authority  should  not  care  to  purchase  at  the 
expiry  of  the  period  fixed,  —  on  the  ground  that  the 
plant  had  not  yet  become  sufficiently  profitable  to 
make  purchase  desirable,  —  then  it  should  have  the 
right  of  purchase  at  the  end  of  every  recurring  period 
of  seven  years.  This  provision,  it  will  be  remem- 
bered, is  inserted  also  in  all  tramway  and  light  rail- 
way franchises. 

The  condition  upon  which  the  Association  of 
Municipal  Corporations  permitted  the  House  of 
Commons  to  accept  the  Bill  of  1888  was  that  the 
local  authority  concerned  should  have  the  right  to 
register  a  protest  against  the  Board  of  Trade  issuing 
a  charter  to  a  company,  and  that  the  Board  of  Trade 
should  overrule  such  protest  only  on  condition  of 
making  a  written  statement  to  Parliament  of  the 
reasons  for  its  action.  The  municipalities  had  asked 
for  the  unqualified  veto,  but  the  Government  had 
been  unwilling  to  grant  that,  because  of  the  manner 
in  which  the  local  authorities  had  abused  the  veto 
power  given  them  by  the  Tramways  Act,  1870. 
But  in  Great  Britain,  as  in  all  other  countries,  there 
is  often  a  vast  difference  between  a  law  as  it  reads 
and  a  law  as  it  works.  In  effect,  the  power  of  pro- 
test of  the  local  authorities  became  the  power  cf 


MUNICIPALITIES   versus  CONSUMER  243 

unqualified  veto,  and  remained  such  until  the  Report 
from  the  Joint  Committee  on  Municipal  Trading, 
1900,  made  public  the  evidence  as  to  the  scandalous 
manner  in  which  the  Board  of  Trade  was  administer- 
ing the  Act  of  1888.  Even  to-day  the  power  of 
protest  in  the  hands  of  the  local  authorities  is  not 
much  short  of  the  power  of  veto.  The  reason  for 
this  difference  between  the  wording  and  the  working 
of  the  law  is  that  in  Great  Britain,  as  everywhere 
else,  the  Government  of  the  day  has  constantly  to 
consider  the  effect  of  its  administrative  policy  on 
its  political  fortunes.  The  men  who  constitute  the 
British  Ministry  are  great  party  leaders,  and  they 
must  constantly  have  a  care  not  to  lose  support  in  the 
House  of  Commons,  and  still  more,  not  to  alienate 
the  constituencies  of  their  supporters  in  the  House 
of  Commons  by  adopting  an  administrative  policy 
that  would  arouse  determined  opposition  among  the 
electors  at  large,  or  even  among  a  comparatively 
small  but  highly  organized  and  vociferous  body  of 
electors. 

When  Parliament  refused,  in  1888,  to  give  the 
local  authorities  anything  more  than  a  "provisional 
veto,"  it  reaffirmed  the  decision  at  which  it  had 
arrived  in  1882.  The  motives  for  that  decision  were 
set  forth  at  length,  in  1883,  by  Mr.  T.  H.  Farrer,  who 
spoke  from  knowledge  gained  "from  having  been 
present  at  the  whole  sitting  of  the  Committee"  (on 
the  Electric  Lighting  Bill,  1882).     He  said :  "It  was 


244      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

undoubtedly  the  intention  of  the  Committee  of  last 
session,  that  the  Provisional  Order  should  be  made 
use  of  as  a  means  of  inducing,  and  to  some  extent 
compelling,  inert  local  authorities  to  admit  this  new 
invention.  Now  if  it  is  in  the  power  of  a  local  author- 
ity, by  simply  saying :  '  We  will  not  go  into  the  merits 
of  the  case  (of  the  demand  by  a  company  for  a  Provi- 
sional Order),  we  simply  stand  upon  our  non  volu- 
mus?  it  seems  to  us  that  there  would  be  an  end  to 
Provisional  Orders  altogether.  ...  It  was  felt 
that  whilst  local  authorities  represented  the  rate- 
payers, they  were  in  many  cases  inert  bodies  not 
willing  to  adopt  new  things,  in  some  cases  perhaps 
being  prejudiced  by  being  the  owners  of  gas  under- 
takings, and  therefore  not  by  any  means  certain  in 
all  cases  to  give  the  ratepayers  the  benefit  of  this 
new  invention."*  In  1886,  Mr.  H.  G.  Calcraft, 
Permanent  Secretary  of  the  Board  of  Trade  from 
1886  to  1893,  testified  as  follows:  "I  think  that  the 
Board  of  Trade  are  always  disposed  to  place  great 
confidence  in  the  decision  arrived  at  by  a  corpora- 
tion (municipality),  or  a  local  authority,  in  matters 
of  this  kind  (the  exercise  of  the  provisional  veto); 
and  if  after  mature  consideration  they,  as  the  repre- 
sentatives of  the  population,  arrive  at  the  conclusion 
that  it  is  the  best  bargain  that  can  be  made,  the 
Board  of  Trade  would  be  inclined  not  to  disagree 

*  Report  of  Committee  on  Electric  Lighting  Provisional  Orders  Bills, 
1883;   q.  1  to  113. 


MUNICIPALITIES  versus  CONSUMER  245 

with  the  corporation,  unless  there  were  some  very 
strong  reasons  on  public  grounds  against  the  pro- 
posal." Lord  Bramwell  queried:  "But  is  it  not 
possible  that  many  individuals  within  the  area  might 
be  very  glad  to  have  the  light  upon  certain  terms, 
but  that  they  may  not  be  able  to  persuade  the  local 
authority"  (to  let  a  company  come  in)?  The 
answer  came:  "I  suppose  that  may  be  the  case; 
but  I  should  have  thought  that  the  local  authority 
was  a  good  judge  of  what  was  to  the  interest  of  the 
locality  generally."  *  In  1898,  Sir  Courtenay  Boyle, 
Permanent  Secretary  of  the  Board  of  Trade  from 
1893  to  1 90 1,  testified  as  follows:  "We  do  not  like 
doing  it  (overruling  the  provisional  veto).  Our 
principle  is  to  trust  the  local  authorities  as  represent- 
ing the  ratepayers  and  knowing  what  is  best  for  their 
district.  We  are  very  often  asked  to  do  so  on  the 
ground  that  the  local  authorities  are  interested  in 
gas,  for  instance,  and  for  various  other  reasons.  But, 
as  a  rule,  we  do  not  dispense  with  their  consent.  It 
is  an  extreme  step  to  take ;  the  Board  of  Trade  have 
done  it,  but  in  a  very  few  cases."  f  In  the  same  year, 
before  another  Committee,  Sir  Courtenay  Boyle 
used  these  words:  "We  generally  require  it  to  be 
shown  that  there  are  special  reasons;  that  the  local 
authority  are  unnecessarily  dilatory  (in  establishing 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amend- 
ment Bills,  1886;  q.  2265  and  2303. 

f  Report  of  Joint  Committee  on  Electricity  Generating  Stations  and 
Supply,  1898;    q.  13,  78,  and  79. 


246     MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

a  municipal  plant),  or  (I  do  not  like  to  use  the  phrase, 
'dogs  in  the  manger')  that  they  will  not  do  the  thing 
themselves,  and  will  not  let  other  people  do  it."  * 

The  testimony  submitted  in  1898  to  the  Joint 
Select  Committee  on  Electricity  Generating  Stations 
and  Supply  was  such  that  the  Committee  reported: 
"The  Committee  consider  that  the  provisions  of  the 
Electric  Lighting  Act,  1888,  which  require  the  (pro- 
visional) consent  of  the  local  authority  as  a  condition 
precedent  to  the  granting  of  a  Provisional  Order,  should 
be  amended.  In  their  opinion,  the  local  authority 
should  be  entitled  to  be  heard  before  the  Board  of 
Trade,  but  should  not  have,  so  to  speak,  a  provi- 
sional veto,  only  to  be  dispensed  with  in  special 
cases  by  the  Board  of  Trade."  Four  years  after 
this  report  had  been  made,  in  June,  1902,  a  deputa- 
tion from  the  Institution  of  Electrical  Engineers 
waited  on  Mr.  Gerald  Balfour,  President  of  the  Board, 
and  asked  that  the  recommendation  of  the  Joint 
Select  Committee  of  1898  be  given  effect.  Mr. 
Gerald  Balfour  stated  that  a  Bill  had  been  prepared 
to  give  effect  to  that  recommendation. f  But  at  the 
close  of  the  session  of  ^03-4  the  Government  had 
not  yet  summoned  courage  to  introduce  the  measure 
into  Parliament. 

Before  the  Joint  Select  Committee  on  Municipal 
Trading,    1900,   the  promoters  of  electrical  under- 

*  Report  of  Select  Committee  on  Telephones,  1898;   q.  6792  to  6798. 
f  Garcke:  Manual  of  Electrical  Undertakings,  1903;  p.  12  and  26. 


MUNICIPALITIES   versus  CONSUMER  247 

takings  testified  at  length  concerning  the  difficulty  of 
Municipal  Policy  obtaining  charters  from  the  Board 
prevents  Develop-  of  Trade.  Mr.  Sydney  Morse, 
mmt  Chairman  of   the  Municipal  Trading 

Committee  of  the  London  Chamber  of  Commerce, 
appeared  on  behalf  of  the  London  Chamber.  As 
counsel  to  a  large  number  of  electrical  undertakings 
of  all  kinds,  he  had  a  vast  experience  in  the  field  under 
discussion.  He  said:  "We  have  to  prove  the  con- 
sent (of  the  local  authority)  to  the  Board  of  Trade ; 
but  although  the  Board  of  Trade  have  the  power  to 
dispense  with  the  consent  of  the  local  authority,  until 
last  year  they  had  never  used  it  in  any  case ;  it  was 
a  mere  question  of  grant  or  no  grant.  What  I  have 
found  occurred  was  this  with  regard  to  the  early 
days  (1889)  when  electric  lighting  was  first  being 
put  forward  as  really  an  experimental  matter,  that  it 
was  not  difficult  to  get  the  consent,  because  it  was 
difficult  to  find  any  one  to  take  up  the  experiment, 
but  that  as  the  matter  has  become  more  of  an  as- 
sured success,  so  it  has  been  more  difficult.  To 
get  the  consents  nowadays,  if  you  go  to  the  smallest 
districts  in  the  country,  you  have  very  onerous  con- 
ditions put  upon  you  as  a  condition  for  the  consent. 
We  also  find  where  the  authority  owns  the  gas  works 
that  we  frequently  have  this  argument  addressed  to 
the  Board  of  Trade :  that  the  authority  has  invested 
a  large  sum  in  gas  which  might  be  endangered  if 
electric  lighting  were  allowed  to  be  brought  in  by  a 


248    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

company;  and  that  has  prevailed."  The  Chairman 
queried:  "Have  you  ever  known  a  case  where  that 
argument  has  been  publicly  brought  forward?" 
The  reply  was:  "I  had,  in.  my  own  practice  this 
year,  a  case  in  Wales  where  we  applied  for  a  Provi- 
sional Order  under  the  Electric  Lighting  Acts,  and 
the  consent  of  the  three  local  authorities  where  we 
desired  the  power  was  necessary;  and  they  put  that 
argument  forward  to  the  Board  of  Trade,  and  that 
argument  prevailed."  The  Chairman  continued: 
"Are  you  prepared  to  say  that  that  was  the  argu- 
ment upon  which  the  Board  of  Trade  acted?"  The 
witness  replied:  "It  was  the  only  argument  put  for- 
ward by  the  opponents ;  they  did  not  give  their  con- 
sent because  they  had  these  gas  works.  Of  course, 
I  cannot  say  what  the  Board  of  Trade  actually  had 
in  their  mind  in  deciding,  but  it  was  the  only  argu- 
ment I  knew  of  as  being  put  forward  against  us."  * 
Lord  Avebury,  formerly  Sir  John  Lubbock,  and 
President  of  the  Association  of  Chambers  of  Com- 
merce, the  Statistical  Society,  the  Building  Societies' 
Association,  and  Vice-President  of  the  London 
Chamber  of  Commerce,  was  asked:  "Would  you 
say  that  the  possession  of  a  gas  enterprise  by  a  cor- 
poration would  tend  to  prejudice  them  against  the 
introduction  of  any  electric  light  scheme?"  He 
replied:    "That  is  certainly  my  impression.     From 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900; 
q.  794  and  849. 


MUNICIPALITIES   versus  CONSUMER  249 

circumstances,  I  have  had  a  great  deal  to  do  with 
many  new  inventions,  I  may  say  all  my  life.  I 
assisted  —  or  rather  I  ought  to  say,  impeded  —  my 
father  in  taking  the  first  daguerreotype  which  was 
ever  taken  in  this  country,  and  from  that  day  to  this 
I  have  taken  a  great  interest  in  all  new  inventions. 
I  was  chairman  of  the  Edison  Swan  Company  at 
one  time,  and  certainly  my  impression  was  that 
we  then  had  greater  difficulties  in  dealing  with 
municipalities  which  had  invested  in  gas,  because 
they  thought  we  were  introducing  a  competing 
light,  and  interfering  with  the  value  of  their  property. 
I  believe  this  Committee  have  had  before  them  evi- 
dence of  the  large  number  of  Provisional  Orders  which 
have  been  taken  out  by  municipalities  and  upon 
which  nothing  has  been  done.  It  is  rather  difficult 
to  resist  the  conclusion  that  that  has  been  done  with 
a  view  of  protecting  their  interest  in  gas ;  but,  what- 
ever the  object  may  have  been,  there  is  no  doubt 
that  the  effect  has  been  very  much  to  check  the 
development  of  electric  light  and  other  electrical 
development  in  this  country."  * 

Mr.  W.  L.  Madgen  cited  a  number  of  specific 
instances  of  the  refusal  of  local  authorities  to  give 
their  consent  to  the  Board  of  Trade  issuing  a  Pro- 
visional Order  to  a  company.  He  cited  Maccles- 
field, saying:    "It  is  stated  frankly  in  the  district, 

*  Report  from  the  Joint   Committee   on  Municipal    Trading,    1900; 

q- 1556- 


250    MUNICIPAL  OWNERSHIP   IN  GREAT  BRITAIN 

that  being  owners  of  the  gas  works  they  desire  to  keep 
out  competition."  *  He  next  spoke  of  the  corpora- 
tion of  Newbury  which  had  obtained  a  charter  in 
1892,  but  had  failed  to  make  any  use  of  it.  A  com- 
pany asked  the  corporation  to  sell  the  charter, 
whereupon  the  corporation  asked  the  company  to 
agree  to  charge  for  electricity  rates  that  would  not 
compete  with  the  municipal  gas  plant's  rates.  A 
company  notified  Milton -next -Sittingbourne  of  its 
intention  to  apply  for  a  Provisional  Order.  There- 
upon the  town  clerk  wrote :  "  My  Council  have 
directed  me  to  state  .  .  .  that  as  the  gas  works  at 
Milton  belong  to  the  Council  they  will,  at  the  proper 
time,  take  the  necessary  measures  for  opposing  the 
proposed  issue  of  a  Provisional  Order  for  supplying 
electricity  for  public  or  private  lighting  within  their 
district."  Mr.  Madgen  continued:  "I  think  one 
of  the  hardest  cases  —  I  do  not  want  to  use  a  strong 
expression,  but  I  feel  inclined  to  say  a  flagrant  case 
—  is  the  Neath,  Briton  Ferry,  and  Aberavon.  These 
in  1 89 1  had  a  joint  population  of  23,000  —  in  round 
figures  now  24,000.  It  is  a  typical  South  Wales 
manufacturing  district,  which  has  not  been  very 
successful,  and  which  is  subject  to  great  depression, 
as  most  of  South  Wales  is.  I  feel  confident  from 
what  I  know  of  the  district  that  it  would  be  bene- 
fited by  a  cheap  supply  of  electrical  energy  for  in- 

*  In  December,  1904,  Macclesfield  had  35,000  inhabitants,  but  was 
without  electric  light  and  street  railways. 


MUNICIPALITIES  versus  CONSUMER  251 

dustrial  and  other  purposes,  and  I  should  be  willing 
to  make  the  venture."  Mr.  Madgen  then  stated  that 
in  1898  his  company  had  been  notified  by  the  cor- 
poration of  Neath  that  Mr.  Madgen  need  not  trouble 
to  come  down  to  Neath  for  any  conference  on  the 
subject  of  the  corporation  assenting  to  the  issue  of  a 
Provisional  Order  for  electric  lighting,  "having  re- 
gard to  the  very  large  amounts  which  they  have 
expended  on  their  gas  undertaking  .  .  .  and  for 
various  other  reasons."  In  the  following  year, 
1899,  Mr.  Madgen's  company  asked  the  Board  of 
Trade  to  dispense  with  the  consent  of  Neath,  Briton 
Ferry,  and  Aberavon.  Thereupon,  the  Board  of 
Trade  checkmated  the  company  by  asking  it  to  give 
evidence  of  a  demand  in  the  district  for  electric 
current.  Mr.  Madgen  concluded  with  the  words: 
"But  that  we  were  unable  to  do,  as  we  find  as  a 
matter  of  experience,  that  the  probable  consumers 
are  unwilling  to  commit  themselves  until  the  supply 
is  actually  available.  That  is  an  axiom  among  en- 
gineers, you  cannot  get  consumers  to  commit  them- 
selves until  they  see  the  mains  being  laid."  *  Neath, 
population  14,000,  obtained  supply  in  1903;  but 
Briton  Ferry,  population  7000,  and  Aberavon,  popu- 
lation 8000,  were  without  supply  in  December,  1904. 
Mr.  A.  A.  C.  Swinton,  a  member  of  the  Council  of 
the  Institution  of  Electrical  Engineers,  a  director  in 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900; 
1659  to  1673. 


252    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

several  electric  light  companies,  and  consulting  en- 
gineer to  a  number  of  local  authorities,  supplemented 
Mr.  Madgen's  evidence  as  to  the  way  the  Board 
of  Trade  plays  into  the  hands  of  the  local  authori- 
ties. He  cited  the  case  of  Weston-super-Mare, 
which  had  taken  a  Provisional  Order  in  1891  for 
the  purpose  of  "blocking"  the  companies.  Between 
1 89 1  and  1898  several  companies  made  futile  efforts 
to  buy  the  charter.  "In  1897  some  local  people 
formed  themselves  into  a  company  to  apply  to  the 
Board  of  Trade  to  revoke  the  Order  and  obtain  a 
further  Order  for  their  company.  This  application 
was  made  in  1898,  and  was  refused  by  the  Board 
of  Trade,  who  gave  the  local  authority  another  year 
to  consider  the  matter.  The  local  authority  again 
did  nothing,  and  in  the  session  of  1899  another  ap- 
plication was  made  by  the  local  people,  and  the 
Board  of  Trade  then  directed  that  a  local  inquiry 
should  be  held.  Then  the  Urban  Council  came  to 
the  conclusion  that  they  could  no  longer  leave  the 
matter  in  abeyance.  Apparently  they  were  ag- 
grieved at  the  people  who  had  forced  them  into  this 
position,  so  they  went  and  gave  the  Order  to  some 
totally  distinct  people.  That  is  an  instance  of  how 
these  matters  get  stopped  and  arrested.  After  one 
or  two  experiences  like  that  people  will  not  take  the 
trouble  and  devote  their  energies  to  trying  to  develop 
an  industry  where  they  are  treated   that  way."  * 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900 ; 

q-  1313- 


MUNICIPALITIES   versus  CONSUMER  253 

The  Board  of  Trade  could  have  protected  the  per- 
sons who  had  brought  before  it  the  Weston-super- 
Mare  case,  by  exercising  its  power  to  revoke  the 
Weston  charter  for  failure  of  the  local  authority  to 
supply  current  within  the  period  fixed  in  the  charter, 
either  two  or  three  years. 

The  extent  to  which  the  Board  of  Trade's  refusal 
to  overrule  the  provisional  veto  of  the  local  authori- 
ties has  denied  to  the  public  the  use  of  the  electric 
current  for  power  and  lighting  is  indicated  in  the 
following  facts.  Rhondda,  a  city  of  114,000,  thus 
far  has  kept  out  the  electric  light,  even  without  going 
through  the  form  of  taking  out  a  Provisional  Order 
for  "blocking"  purposes.  Tottenham,  a  part  of 
Metropolitan  London,  with  a  population  of  116,000, 
did  not  feel  the  necessity  of  taking  out  a  "blocking" 
charter  until  1902.  In  1905,  the  Town  Council  was 
debating  what  to  do  with  its  charter  —  whether  to 
use,  to  sell  it,  or  to  sit  on  it. 

Ever  since  1882,  the  Board  of  Trade  has  issued 
this  notice  for  the  guidance  of  applicants  for  Pro- 
visional Orders:  "When  application  for  Provisional 
Administrative  0rders  authorizing  the  supply  of  elec- 
Discrimination  tricity  within  the  district  of  any  local 
against  Com-  authority  are  received  by  the  Board  of 
Trade  from  such  local  authority,  and 
also  from  any  other  authority,  company,  or  person,  the 
Board  of  Trade  will  give  the  preference  to  the  ap- 


254    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

plication  of  the  local  authority  of  the  district  in  every 
case  where,  in  the  opinion  of  the  Board  of  Trade, 
no  special  circumstances  exist  which  render  such 
preference  inexpedient."  *  In  1883,  Mr.  T.  H. 
Farrer,  Permanent  Secretary  of  the  Board  of  Trade, 
testified  that  the  local  authority  must  show  that  it 
had  a  "  bona  fide"  scheme  for  supplying  the  district. f 
Similar  testimony  was  given  in  1886  by  Mr.  H.  G. 
Calcraft,  Permanent  Secretary  of  the  Board  of  Trade ; 
and  in  1898  by  Sir  Courtenay  Boyle,  Permanent 
Secretary  of  the  Board  of  Trade.  J  Neither  the  Act 
of  1882  nor  that  of  1888  confers  specifically  upon  the 
Board  of  Trade  this  power  to  discriminate  against 
companies.  One  would  presume,  therefore,  that 
the  Board  of  Trade  would  exercise  care  to  make  sure 
of  the  good  faith  of  a  local  authority  asking  for  a 
charter  in  competition  with  a  company;  also,  that 
the  Board  of  Trade  would  exercise  its  power  to  re- 
voke a  charter  when  subsequent  events  had  shown 
that  the  local  authority  had  not  acted  in  good  faith 
when  applying  for  a  charter.  But  the  examination 
of  the  facts  shows  that  the  Board  of  Trade  took  no 
pains  to  assure  itself  of  the  good  faith  of  the  local 
authorities,  and  that  it  refused  to  be  convinced  by 
subsequent  events  that  local  authorities  had  acted 
in  bad  faith. 

*  Traction  and  Transmission,  1902,  p.  148. 

t  Report  of  Committee  on  Electric  Lighting,  Provisional  Bills,  1883; 
q.  12. 

%  Report  from  Select  Committee  on  Telephones,  1898 ;  q.  6794  to  6798. 


MUNICIPALITIES  versus  CONSUMER 


255 


Every  Provisional  Order  granted  to  a  local  au- 
thority or  to  a  company  contains  a  clause  authorizing 
the  Board  of  Trade  to  revoke  said  charter  if  the  holder 
thereof  shall  fail  to  supply  current  within  a  specified 
time,  usually  two  or  three  years,  in  rare  cases  four 
years.  At  the  close  of  1904,  supply  was  available 
under  294  Provisional  Orders  issued  to  local  authori- 
ties. In  105  of  those  cases,  five  to  sixteen  years  had 
elapsed  between  the  issue  of  the  Order  and  the  supply 
of  current.*    On  the  other  hand,  supply  was  avail- 

*  Years  elapsed  between  the  issue  of  the  Provisional  Order  and  the 
supply  of  current,  in  the  case  of  local  authorities  and  of  companies, 
respectively.  Table  constructed  from  data  obtained  from:  Report  by  the 
Board  of  Trade  respecting  th-e  Applications  to  and  Proceedings  of  the 
Board  of  Trade  under  the  Electric  Lighting  Act,  1882  to  1902,  during 
the  year  1902-03:  Garcke:  Manual  of  Electrical  Undertakings,  1904; 
and  The  Electrician,  supplements  of  January,  1905. 

Supply  Available 


Years  Elapsed 

Local  Authorities 

Companies 

O 

9 

36 

I 

13 

29 

2 

55 

35 

3 

63 

23 

4 

51 

7 

5 

36 

2 

6 

22 

I 

12 
9 

9 

6 

10 

13 

11 

3 

12 

2 

14 

1 

16 

1 

Not  ascertainable 

8 

Total  .     .     . 

294 

133 

256    MUNICIPAL   OWNERSHIP    IN   GREAT   BRITAIN 

able  under  133  Provisional  Orders  issued  to  com- 
panies. In  123  of  those  cases  supply  had  been 
available  within  three  years  after  the  issue  of  the 
Order. 

Again,  at  the  close  of  1904,  no  supply  was  avail- 
able under  54  Provisional  Orders  issued  to  local 
authorities  between  1890  and  1900.*  Acton,  popu- 
lation 38,000,  had  been  sitting  on  its  charter  for  four- 
teen years ;  Bacup,  population  23,000,  had  been  doing 
the  same ;  Llanelly  and  Waterford,  with  populations 
of  respectively  26,000  and  27,000,  had  been  sitting 
on  their  charters  for  thirteen  years. 

Finally,  examination  of  the  records  reveals  the 
fact  that  in  the  matter  of  revoking  charters  for  non- 
use,  the  Board  of  Trade  administered  the  Electric 

♦No  Supply  Available 


Years  Elapsed 

Local  Authorities 

Companies 

I 

24 

II 

2 

29 

IO 

3 

53 

8 

4 

31 

4 

i 

26 
13 

i» 

I 

4 

I 

10 

3 

12 

1 

13 

3 

14 

3 

Total  .    .    . 

191 

34 

1  This  order  was  transferred  to  a  local  authority. 


MUNICIPALITIES  versus  CONSUMER 


257 


Lighting  Act  in  such  way  as  to  make  one  law  for 
local  authorities  and  another  law  for  companies. 
At  the  close  of  1903,  the  Board  of  Trade  had  repealed 
92  charters  granted  to  companies.  In  five  cases 
only  had  it  allowed  more  than  three  years  to  elapse 
after  the  issue  of  the  charter.  On  the  other  hand, 
at  the  close  of  1903,  the  Board  of  Trade  had  revoked 
only  20  charters  issued  to  local  authorities;  and  in 
19  of  those  cases  it  had  allowed  more  than  three  years 
to  elapse.*  Moreover,  the  eleven  cases  in  which  the 
Board  of  Trade  revoked  Provisional  Orders  issued 
to  local  authorities,  and  in  force  only  from  three  years 
to  six,  occurred  in  1900  to  1904,  —  that  is,  after  the 
Joint  Select  Committee  on  Municipal  Trading  had 
taken  evidence  upon  the  way  in  which  the  Electric 
Lighting  Acts  were  being  administered.  Previous 
to  1900  the  Board  of  Trade  had  not  revoked  a  local 

*  Years  elapsed  between  the  issue  and  the  revocation  of  the  charter 
in  the  case  of  companies  and  of  local  authorities,  respectively. 


Years  Elapsed 

Local  Authorities 

Companies 

I 

O 

48 

2 

O 

33 

3 

I 

6 

4 

4 

1 

5 

3 

2 

6 

3 

1 

7 

2 

0 

8 

4 

1 

9 

2 

0 

10 

1 

0 

Total  .    .    . 

20 

92 

258     MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

authority  Provisional  Order  that  had  not  been  in 
force  at  least  seven  years. 

The  main  reason  why  the  local  authorities  have 
taken  out  so  many  Provisional  Orders  for  the  pur- 
pose of  sitting  on  them  has  been  the  desire  to  reserve 

■  Hal  ^e  ^e^  unt^  suc^  t*me  as  ^y  could 

«  Orders  "for  summon  courage  to  install  municipal 
« Blocking"  Pur-  plants.  In  this  connection  it  should 
poses  ^  remembered  that  even  the  larg- 

est cities,  such  as  Glasgow,  Birmingham,  Liver- 
pool, and  Manchester,  were  still  afraid  to  embark 
in  electric  lighting  in  1892,  when  there  were  in 
operation  in  the  United  States  1454  central  electric 
stations.  There  were  also  many  other  reasons  that 
prevented  the  local  authorities  from  using  their  char- 
ters. In  1895,  Mr.  W.  H.  Preece,  Engineer-in-Chief 
to  the  British  Post  Office,  who  has  a  large  practice 
as  consulting  engineer  to  local  authorities,  testi- 
fied that  the  "fluctuating  make-up  of  town  coun- 
cils is  a  very  serious  difficulty  in  the  conduct  by  a 
municipality  of  a  competitive  business.  I  have 
the  experience  of  electric  lighting  in  mind.  Large 
municipalities  overcome  the  difficulty  by  forming 
small  and  strong  committees  and  reelecting  the 
same  chairman  and  thus  maintain  a  kind  of  con- 
tinuity of  policy.  Small  corporations  start  with 
very  large  committees;  they  are  constantly  chang- 
ing, and  the  result  is  that  you  find  sometimes 
inability  to  agree  upon  the  system  to  be  used ;   some- 


MUNICIPALITIES   versus  CONSUMER  259 

times  inability  to  agree  upon  the  man  to  be  em- 
ployed to  conduct  the  service;  and  it  is  incessant 
trouble  and  squabble."  *  Before  the  Joint  Select 
Committee  of  1900,  Mr.  A.  A.  C.  Swinton  testi- 
fied to  a  similar  effect.  He  cited  the  instance  of 
York,  which  had  a  population  of  72,000  in  1891. 
That  city  took  out  a  charter  in  1890,  but  did  not 
supply  current  until  April,  1900.  Mr.  Swinton 
also  intimated  that  the  influence  upon  the  town 
councils  of  the  owners  of  private  gas  plants  was 
an  element  in  the  taking  out  of  blocking  charters. f 
Mr.  W.  L.  Madgen  said:  "It  is  the  feeling  of  elec- 
trical engineers  that  many  of  these  Orders  have 
been  obtained  for  blocking  purposes.  In  some 
cases  the  local  authorities  themselves  own  gas 
works,  in  other  cases  the  (private)  gas  interests 
on  the  (town)  council  are  strong."  % 

The  following  table  shows  that  there  were  in 
the  United  States,  in  June,  1902,  3620  central  elec- 
tric stations.  Of  those  3520  supplied  current  for 
The  United  incandescent  lighting  and  100  supplied 

Kingdom  out-  current  for  power  purposes  or  arc  light- 
stripped  by  the       mg    onl        Considering  that   in  the 

United  States  .  °        .  ,  ,  , 

first  six  months  of  1902  there  were 
opened   146  central  electric  stations,   one  will  not 

*  Evidence  taken  before  Committee  on  the  Question  of  Adequacy  of 
the  Telephone  Service  in  Local  Areas,  1895;    q.  2830  and  2831. 

t  Report  from  Joint  Select  Committee  on  Municipal  Trading,  1900; 
1310  to  1313. 

%  Report  from  Joint  Select  Committee  on  Municipal  Trading,  1900; 
q.  1659. 


260    MUNICIPAL  OWNERSHIP  IN  GREAT   BRITAIN 

do  much  violence  to  the  facts  in  assuming  that  at 
the  close  of  1902  current  for  incandescent  lighting 
was  supplied  by  3600  central  electric  stations. 
Further  inspection  of  the  table  shows  that  the 
central  electric  stations  were  sufficient  in  number 
to  average  a  station  to  every  place  of  25,000  or  more 
inhabitants;  one  station  each  to  90  per  cent  of 
the  places  of  5000  and  less  than  25,000  inhabit- 
ants; and,  finally,  one  station  each  to  77  per  cent 
of  the  places  of  1000  and  less  than  5000  inhabit- 
ants. This  table  understates  the  extent  to  which 
the  places  of  1000  and  less  then  25,000  inhabitants 
are  supplied  with  central  electric  stations,  for  it 
exaggerates  the  number  of  such  places.  The  fed- 
eral census  returns  for  1900  give  the  population 
of  only  the  incorporated  villages,  towns,  and  cities. 
They  do  not  give  the  population  of  the  unincor- 
porated but  populous  places  of  New  England. 
There  have  therefore  been  added  to  the  federal 
census  returns  621  New  England  townships  with 
a  population  of  1000  and  less  than  5000,  and  83 
townships  with  a  population  of  5000  and  less  than 
25,000.  Finally,  this  table  makes  no  allowance 
for  the  fact  that  some  of  the  3620  stations  supply 
current  to  surrounding  cities,  towns,  and  villages, 
so  that  the  enumeration  of  places  in  which  central 
stations  are  located  does  not  fully  represent  the 
distribution  of  current. 


MUNICIPALITIES   versus  CONSUMER  261 

Electric  Service  in  the  United  States  and  Great  Britain* 


United  States 

United  Kingdom 

Population 

Number 

of 

Places 

Number  of  Cen- 
tral Electric 

Stations, 
June,  1902 

Number 

of 
Places 

Number  of 

Places  supplied 

with  Electric 

Current, 

December,  1904 

1,000  and  under      5,000 

5,000  and  under    25,000 

25,000  and  under  100,000 

100,000  and  over      .     .     . 

3502 

755 
123 

38 

% 
2714  =  77.5 
675  =  89.4 
128 
103 

3620 

607 

613 

170 
66 

/o 

54  =    9 
195  =  31.8 
144  =  84.7 

64 

457 

Finally,  it  appears  that  at  the  close  of  1904, 
there  were  in  the  United  Kingdom  363  central 
electric  stations,!  which  supplied  current  for  incan- 
descent lighting  to  457  places;  that  no  current 
was  available  in  two  places  of  100,000  inhabit- 
ants; that  none  was  available  in  26  places  of 
25,000  and  less  than  100,000  inhabitants;  and  that 
current  was  available  in  only  9  per  cent  of  the 
places  of  1000  and  less  than  5000  people,  and  in 
only  31.8  per  cent  of  the  places  of  5000  and  less 
than   25,000  people. J    Had   the  United   Kingdom, 

*  Bureau  of  the  Census  Bulletin,  5,  1903,  Central  Electric  Light  and 
Power  Stations;  Twelfth  Census  of  the  United  States,  1900,  Vol.  I, 
Population;  The  Electrician,  supplements  of  January,  1905;  Garcke: 
Manual  of  Electric  Undertakings,  1904;  and  The  Municipal  Year  Book 
of  the  United  Kingdom,  1904,  edited  by  Robert  Donald. 

f  The  number  of  central  electric  stations  supplying  current  had  risen 
to  384  in  January,  1906. 

I  The  subjoined  table  gives  in  detail  the  number  of  places  of  various 
sizes,  the  total  number  of  such  places  in  which  electricity  is  available, 
as  well  as  the  source  of  the  electricity  —  that  is,  whether  supplied  by 


262    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

in  1904,  been  as  well  supplied  with  central  electric 
stations  as  were  the  United  States  in  1902,  current 
for  incandescent  lighting  would  have  been  avail- 
able, not  in  457  places,  but  in  1256  places.  In 
fact,  current  would  have  been  available  in  more 
than  1256  places,  if  allowance  be  made  for  the 
numerous  populous  places  which  exist  in  the  so- 
called  Rural  Districts  of  England  and  Wales,  but 
were  not  included  in  the  foregoing  enumeration. 
With  very  few  exceptions,  the  enumeration  is  con- 
fined to  boroughs  and  urban  districts. 


In  striking  contrast  to  the  comparative  absence 
of  central  electric  stations  in  the  United  Kingdom 
is  the  great  number  of  gas  plants.  In  1903  there 
were  1598  gas  plants,  of  which  number  888  were 

companies  or  by  local  authorities.     It  will  be  noticed  that  the  companies 
have  been  confined  very  largely  to  cities  of  less  than  25,000  inhabitants. 


Electricity 

Population 

Number  of 
Places 

supplied  by  : 

Companies 

Local 
Authorities 

Total 

1,000  and  under 

5,000 

607 

5° 

4 

54 

5,000  and  under 

10,000 

316 

44 

18 

62 

10,000  and  under 

20,000 

256 

60 

45 

105 

20,000  and  under 

25,000 

41 

*3 

*5 

28 

25,000  and  under 

30,000 

38 

4 

22 

26 

30,000  and  under 

40,000 

51 

10 

33 

43 

40,000  and  under 

50,000 

27 

6 

84 

24 

50,000  and  under 

60,000 

18 

1 

15 

16 

60,000  and  under 

70,000 

14 

2 

11 

13 

70,000  and  under 

80,000 

7 

2 

5 

7 

80,000  and  under 

90,000 

1 

6 

7 

90,000  and  under 

100,000 

8 

2 

6 

8 

MUNICIPALITIES   versus  CONSUMER  263 

non-statutory.*  The  non-statutory  companies  have 
found  their  way  to  the  smallest  places,  as  is 
shown  by  the  fact  that  they  average  only  270 
customers  per  plant,  whereas  the  statutory  com- 
panies average  4800  customers,  and  the  municipal 
gas  plants  average  7700  customers.  The  average 
annual  output  per  non-statutory  gas  plant  is  about 
16,000,000  cubic  feet,  as  against  an  average  of 
200,000,000  for  statutory  companies ;  and  218,000,000 
cubic  feet  for  municipal  plants.  The  non-statutory 
gas  plants  are  an  eloquent  testimony  to  the  enter- 
prise which  the  British  capitalist  displays  when  he 
is  not  paralyzed  by  the  State  or  the  Municipality. 

At  first  blush  it  might  seem  that  an  explanation 
for  the  comparative  absence  of  the  electric  light 
in  the  United  Kingdom  could  be  found  in  large 
part  in  the  wide  distribution  of  gas  plants.  This 
explanation  seems  all  the  more  reasonable  from 
the  fact  that  in  the  United  States,  where  electricity 
has  become  so  common,  there  are  few  gas  plants 
in  the  smaller  places.f  But  examination  of  the 
facts  shows  that  the  explanation  must  be  abandoned 
as  untenable;    for  British  capitalists  would  not  be 

*  "  The  Gas  World"  Year  Book,  1904;  and  The  Municipal  Journal, 
January  8  and  15,  1904. 


t  Population 

Number  of 
Places 

Number  of 
Gas  Plants 

3502 

755 
123 

200 

484 
124 

264    MUNICIPAL   OWNERSHIP   IN  GREAT   BRITAIN 

afraid  to  take  up  competition  with  gas  light  by 
means  of  the  electric  light,  if  they  could  enter  the 
contest  upon  equal  terms.  At  present  those  terms 
are  very  unequal.  The  non-statutory  gas  com- 
pany operates  under  no  restrictions  whatever, 
whereas  the  electric  light  company  operates  under 
"  the  threat  of  purchase  at  the  end  of  forty- two  years," 
to  use  the  phrase  of  Sir  Courtenay  Boyle,  Perma- 
nent Secretary  of  the  Board  of  Trade.  Before  a 
Select  Committee  Sir  Courtenay  Boyle  testified  that 
"if  the  electric  light  companies  were  relieved  from 
the  threat  of  purchase  at  the  end  of  forty-two  years, 
they  would  be  probably  able  to  compete  with  the 
non-statutory  gas  company."  He  -added  that  it 
was  his  opinion  that  the  extension  of  the  life  of 
franchises  from  forty- two  years  to  sixty  years  would 
stimulate  investment  in  electric  lighting  enterprises. 
Similar  testimony  was  given  by  Mr.  H.  G.  Harris, 
of  the  eminent  engineering  firm  of  Bramwell  & 
Harris.*  It  is  scarcely  necessary  to  add  that  the 
policy  of  compulsory  sale  at  reconstruction  value 
is  not  the  only  factor  that  is  hampering  the  spread 
of  central  electric  stations,  and  that  a  further  serious 
hindrance  is  the  fact  that  local  authorities  rarely 
give  an  unqualified  assent  to  the  Board  of  Trade 
issuing  a  charter  to  a  company.  The  local  author- 
ities almost  invariably  sell  their  assent,  when  they 

*  Report  of  Committee  on  Electricity  Generating  Stations  and  Supply, 
1898;  q.  2046,  2072,  2054,  and  1157. 


MUNICIPALITIES  versus  CONSUMER 


265 


can  be  prevailed  upon  to  grant  it  at  all.  The  price 
exacted  is  either  a  cash  price  or  some  abatement 
on  the  part  of  the  company  of  the  rights  which  the 
Electric  Lighting  Acts  nominally  give  the  electric 
lighting   companies. 

But  in  spite  of  the  foregoing  handicaps,  British 
capitalists  have  shown  their  eagerness  to  compete 
with  the  gas  light  by  means  of  the  electric  light. 
Church  Stretton  is  a  village  of  816  inhabitants, 
in  which  an  electric  light  company  is  competing 
with  a  gas  company.  Electricity  is  available  in 
54  places  which  have  a  population  of  iooo  to 
5000,  and  in  44  of  these  places  there  is  gas  supply. 
Again,  electricity  is  available  in  77  places  of  5000 
to  11,000  inhabitants,  and  in  65  of  those  places 
there  is  gas  supply.*  Obviously,  the  spread  of 
the  electric  light  is  not  being  arrested  by  the  fear 
of  capitalists  to  compete  with  the  gas  light  by  means 
of  the  electric  light. 

*  "The  Gas  World"  Year  Book,  1904;  and  Garcke:  Manual  of 
Electrical  Undertakings,  1904. 


Population 

Supply  of 
Electricity 

Supply  of 
Gas 

Range  of  Price 

of  Gas  per  iooo 

Cubic  Feet 

1,000  and  under  2,000    . 
2,000  and  under  3,000    .     . 
3,000  and  under  4,000    . 
4,000  and  under  5,000    . 
5,000  and  under  6,000    . 
6,000  and  under  7,000    . 
7,000  and  under  8,000    . 
8,000  and  under  9,000    . 
9,000  and  under  10,000  . 
10,000  and  under  11,000 

II 
12 
17 
14 
14 
13 
II 

13 
II 

15 

8 
II 

14 
II 
II 
IO 
IO 
II 
9 
14 

$0.80  to  $1.44 
0.72  to     I.50 
0.72  to    I.40 
0.78  to     I.08 
0.66  to     I.80 
0.76  to     I.IO 
O.60  to    0.92 
0.52  to     I.02 
O.50  to     I.08 
0.54  to     I.02 

CHAPTER  XVI 

THE  MUNICIPALITIES  VerSUS  THE  MANUFACTURER 

In  1883  the  Board  of  Trade  issued  a  notice 
"to  guide  applicants  for  charters  under  the  Elec- 
tric Lighting  Act,  1882,"  as  follows:  " No  monopoly 
is,  under  the  Act  or  the  Provisional  Order,  granted 
or  intended  to  be  granted  to  them;  and  should 
they  neglect  their  duties  in  the  district,  or  charge 
exorbitant  prices,  there  is  nothing  to  prevent  the 
immediate  grant  of  a  license  or  Provisional  Order 
to  a  competing  set  of  undertakers  within  the  same 
district.  In  the  case  of  local  authorities  there  will 
be  not  only  competition  to  look  to,  but  also  pub- 
lic opinion.  .  .  .  This  paragraph  is  quoted  at 
length,  because  there  has  been  some  misappre- 
hension of  the  principles  adopted,  and  because  the 
Board  of  Trade  wish  it  to  be  distinctly  understood, 
both  now  and  at  all  future  times,  under  what  con- 
ditions the  present  concessions  are  made,  and 
thus  to  prevent  any  future  claims  to  monopoly  in- 
consistent with  these  conditions."  * 

The  first  section  of  the  Electric  Lighting  Act, 

*  Report  by  the  Board  of  Trade  respecting  the  Applications  to  and 
Proceedings  of  the  Board  of  Trade  under  the  Electric  Lighting  Act,  1882, 
during  the  year  1883. 

266 


MUNICIPALITIES  versus  MANUFACTURER        267 

1882,  Amendment  Act,  1888,  ends  with  the  words: 
"The  grant  of  authority  to  any  Undertakers  to 
supply  electricity  within  any  area,  whether  granted 
by  license  or  by  means  of  a  Provisional  Order,  shall 
not  in  any  way  hinder  or  restrict  the  granting  of  a 
Provisional  Order  to  the  local  authority,  or  to  any 
other  company  or  person  within  the  same  area." 

In  1898  the  Chairman  of  a  Select  Committee 
asked  Sir  Courtenay  Boyle,  Permanent  Secretary 
of  the  Board  of  Trade:  "Have  you  sanctioned 
competing  schemes  in  London?"  —  "Yes,  nearly 
every  area  in  London  has  two  lots  of  undertakers."* 
—  "Have  you  sanctioned  any  competing  schemes 
in  the  country?"  —  "Yes,  we  have  in  one  instance; 
there  is  no  reason  why  we  should  not  do  so.  But 
our  consent  has  not  been  applied  for  for  competing 
undertakings  as  a  rule.  There  is  an  instance  in 
Newcastle."  f 

In  1898  the  large  manufacturers  of  the  district 
of  Chesterfield  formed  a  syndicate  bearing  the  name 
of  "The  General  Power  Distribution  Co.,"  and 
Wholesale  Supply  asked  Parliament  for  authority  to 
of  Electricity         supply  current  to   consumers   in   an 

prevented  area   Qf    2IQ   SqUare   mfles,    including 

Sheffield  and  Nottingham.    The  region  to  be  cov- 

*  In  1904,  in  twelve  Metropolitan  Boroughs  the  local  authority  had 
a  monopoly  of  supply;  in  two  Boroughs  there  was  competition  between 
company  and  local  authority;  and  in  six  Boroughs  there  were  two  or  more 
competing  companies. 

t  Report  of  Committee  on  Electricity  Generating  Stations  and  Supply, 
1898;   q.  71,  72,  107,  108,  845  to  849  and  875. 


268    MUNICIPAL  OWNERSHIP   IN  GREAT   BRITAIN 

ered  was  one  of  the  most  important  manufacturing 
districts  in  England;  it  had  a  population  of 
1,000,000,  but  there  were  only  1546  firms  or  per- 
sons who  were  customers  of  electric  current. 
Local  authorities  and  companies  had  taken  out 
charters,  covering  66  square  miles  of  the  area  in 
question,  but  only  in  4.5  square  miles  was  current 
available.  These  4.5  square  miles  were  the  centre 
of  Sheffield  and  the  centre  of  Nottingham.  In 
Sheffield  a  company  had  been  supplying  current 
since  1893  under  restrictions  that  had  been  imposed 
by  the  corporation  of  Sheffield  and  were  so  onerous 
as  to  compel  the  company  to  charge  10  cents  per 
Board  of  Trade  unit.  In  Nottingham  the  city 
had  been  supplying  since  1894;  but  in  1898  it 
had  only  482  customers  in  a  population  of  about 
220,000.  The  city,  which  owned  the  gas  plant, 
was  charging  6  cents  to  12  cents  per  unit.  The 
General  Power  Distribution  Bill  fixed  the  maxi- 
mum to  be  charged  by  the  proposed  company  at 
8  cents  per  unit  for  the  first  200  hours  in  each 
quarter,  and  at  4  cents  for  the  remainder  of  the 
quarter* 

The  General  Power  Distribution  Bill  was  re- 
ferred to  a  Joint  Select  Committee  of  the  Houses 
of  Parliament;  the  Committee  reported  favorably, 
and  thereupon  the  House  of  Lords  passed  it,  with 
the  amendment  that  in  areas  covered  by  charters 

*  Hansard's  Parliamentary  Debates,  July  12,  1898. 


MUNICIPALITIES   versus  MANUFACTURER        269 

held  by  local  authorities  or  by  existing  companies 
the  General  Power  Distribution  Co.  should  supply 
only  to  those  individuals  or  firms  which  would  take 
current  in  bulk  for  power,  and  not  less  than  10,000 
units  a  year.  The  House  of  Lords,  which  habit- 
ually treats  with  most  scrupulous  regard  all  vested 
interests,  held  that  the  amendment  in  question 
did  ample  justice  to  all  interests  that  had  embarked 
in  electric  lighting  in  the  earlier  period  —  that  is, 
before  it  had  occurred  to  engineers  to  use  for  power 
purposes  electricity  generated  and  supplied  on 
a  large  scale,  and  under  most  favorable  condi- 
tions of  economy.  After  the  Bill  had  passed  the 
House  of  Lords  it  was  too  late  in  the  session  to 
take  it  up  in  the  House  of  Commons,  and  therefore 
leave  was  given  to  the  promoters  to  proceed  with 
the  Bill  in  the  next  session,  that  of  1899* 

In  January,  1899,  shortly  before  the  date  upon 
which  the  House  of  Commons  was  to  take  up  the 
Bill,  the  Lord  Mayor  of  Manchester  called  a  con- 
ference of  the  Municipal  Corporations  of  Lan- 
cashire and  Cheshire.  The  principal  speaker, 
Alderman  Higginbottom,  Chairman  of  the  Man- 
chester Electric  Lighting  Committee,  said:  "If 
the  report  of  the  Select  Committee  of  1898  should 
ever  be  sanctioned  by  Parliament,  it  virtually 
meant  that  the  recognized  control  —  he  laid  em- 
phasis on  the  '  recognized '  —  of  the  streets  of  their 

*  Hansard's  Parliamentary  Debates,  July  22,  1898. 


270    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

towns  would  be  done  away  with  *  In  that  case 
Parliament  would  practically  declare  that  the  monop- 
oly in  the  supply  of  electricity  which  certain  towns 
were  supposed  to  have  obtained  from  the  Board  of 
Trade  existed  only  in  the  mind  of  the  Board  of 
Trade,  and  could  be  done  away  with  by  giving 
power  to  a  company."  f  The  conference  resolved 
to  oppose  the  General  Power  Distribution  Bill 
in  each  House  of  Parliament,  and  at  every  stage, 
and  to  ask  the  cooperation  of  the  Association  of 
Municipal  Corporations,  as  well  as  of  the  Association 
of  Urban  District  Councils.  In  the  year  ending 
with  March,  1898,  the  city  of  Sheffield  had  re- 
ceived on  an  average  7.8  cents  per  unit  of  electric 
current  sold. 

The  Bill  had  the  support  of  all  the  Chambers 
of  Commerce  in  the  area  of  210  square  miles,  in- 

*  Report  of  Committee  on  Electricity  Generating  Stations  and  Supply, 
1898;  q.  1312,  1313,  and  1372.  The  following  questions  and  answers 
passed  between  the  witness,  Mr.  Alderman  Higginbottom,  and  Mr. 
Richards,  of  counsel  for  the  companies.  "  Are  you  aware  that  the  com- 
panies would  lay  mains  under  the  superintendence  and  control  of  the 
corporation  as  the  road  authority?"  "Yes."  "Can  you  suggest,  if 
that  be  so,  any  reason  for  its  being  more  dangerous  for  the  company  to 
lay  mains  in  a  street  than  for  the  corporation  to  lay  them?"  "  I  do  not 
know  that  it  would  be  more  dangerous." 

Subsequently,  Lord  Balcarres,  a  member  of  the  Committee,  asked  the 
witness:  "I  understand  there  is  a  Bill  before  Parliament  ...  to  which 
you  objected  on  the  general  principle  that  your  city  dislikes  private  bodies 
opening  streets.  It  is  difficult,  of  course,  to  assume  that  the  difficulty 
should  be  overcome  in  any  way;  but  for  the  purposes  of  argument,  assum- 
ing that  the  inconvenience  of  breaking  up  streets  should  be  overcome, 
would  Manchester  object  to  the  bill  in  question,  which  offers  the  prin- 
ciple accepted  in  London  of  limited  competition  for  supplying  electric 
light?"  "Yes."  "  You  would  object  to  competition?"  "We  should 
object  to  competition." 

t  The  Electric  Engineer,  January  13,  1899. 


MUNICIPALITIES  versus  MANUFACTURER        271 

eluding  that  of  Sheffield.  Some  of  the  Urban 
District  Councils  were  also  in  favor  of  the  Bill, 
but  they  feared  to  support  it,  not  daring  to  antag- 
onize the  Association  of  Municipal  Corporations, 
whose  good-will  is  of  great  value  to  the  Association 
of  Urban  District  Councils  *  Not  one  Urban  Dis- 
trict Council  was  directly  affected  by  the  General 
Power  Distribution  Bill. 

The  House  of  Commons  rejected  the  Bill  by  a 
vote  of  164  to  132.  The  promoters  had  offered 
to  accept  an  amendment  excluding  the  company 
altogether  from  the  areas  of  the  Municipal  Bor- 
oughs, and  Mr.  Stuart  Wortley,  the  representative 
in  Parliament  of  Sheffield,  had  signified  his  will- 
ingness to  accept  the  compromise.  But  Sir  James 
Woodhouse,f  "as  the  representative  of  the  Asso- 
ciation of  Municipal  Corporations,"  rejected  the 
compromise  and  defeated  the  Bill.  He  said:  "I 
desire  as  the  representative  of  the  Association  of 
Municipal  Corporations  ...  to  say  that  while 
I  am  quite  ready  to  agree  to  the  adjournment  of 
the  Debate,  I  should  not  be  prepared  to  accede  to 
the  suggestion  of  the  honorable  Member  for  Shef- 
field   (Mr.    Stuart  Wortley).     It   may  be   that   the 

*  Report  from  the  Joint  Committee  on  Municipal  Trading,  1900; 
q.  2594;  Mr.  D.  H.  Davies,  Secretary  of  the  Chesterfield  Chamber  of 
Commerce. 

f  Kt.,  cr.  1895,  M.P.  (L.)  Huddersfield,  1895 ;  partner  in  J.  P.  and 
H.  Woodhouse,  solicitors;  Mayor  of  Hull,  1891;  Vice-President  of  Asso- 
ciation of  Municipal  Corporations ;  Director  of  London  City  and  Mid- 
land Bank,  and  of  the  Hull  and  Barnsley  Railway  Co.  —  Who's  Who, 
1905. 


272    MUNICIPAL  OWNERSHIP   IN   GREAT  BRITAIN 

Municipalities  in  that  particular  area  which  the 
company  touches  might  be  satisfied  with  the  ex- 
emption proposed  by  the  honorable  Member  for 
Macclesfield  (Mr.  Bromley  Davenport).  But  the 
Association  of  Municipal  Corporations  has  taken 
up  the  matter  not  only  in  reference  to  a  particular 
area,  but  also  in  regard  to  the  great  principle  which 
underlies  the  Bill,  and  in  respect  to  which  the 
House  is  asked  to  pursue  a  retrograde  policy.  Re- 
serving, therefore,  all  questions  which  arise  in  regard 
to  the  principle,  I  desire  respectfully  to  say,  as 
representing  the  entire  body  of  Municipal  Cor- 
porations, that  we  accept  the  adjournment  but 
not  the  concession."  * 

The  debate  upon  the  Bill  was  instructive  and  is 
worthy  of  a  brief  review.  Mr.  Stuart  Wortley, 
M.P.  for  Sheffield,  and  a  director  of  the  Great 
Municipal  oppo-  Central  Railway,  "as  being  intimately 
sUion  to  Progress  connected  with  the  largest  munici- 
pality which  the  Bill  proposes  to  attack,"  moved 
the  rejection  of  the  Bill.  He  said:  "The  promoters 
are  to  be  permitted,  without  any  restriction  what- 
ever, and  in  the  face  of  any  amount  of  municipal 
opposition,  to  supply  to  manufacturers  who  are  will- 
ing to  take  10,000  units  in  the  course  of  the  year; 
in  other  words,  they  propose  to  take  the  cream  of 
the  consumers.  .  .  .  The  fact  that  the  other  House 
has  passed  the  Bill  indicates  that  in  the  other  House 

*  Hansard's  Parliamentary  Debates,  March  3,  1899. 


MUNICIPALITIES  versus  MANUFACTURER        273 

there  is  not  that  unlimited  respect  and  jealous 
watchfulness  for  the  integrity  and  independence  of 
municipal  privileges  which  the  House  of  Commons 
has  always  shown." 

Mr.  Bromley  Davenport,  who  was  in  charge  of  the 
Bill,  said  that  Mr.  Stuart  Wortley  recently  had  said 
before  the  Chamber  of  Commerce:  "He  found  him- 
self obliged  to  admit  that  when  he  undertook,  at 
the  request  of  the  corporation  of  Sheffield,  to  move 
the  rejection  of  this  Bill,  he  was  not  aware  that  the 
Chamber  of  Commerce  had  petitioned  in  its  favor. 
He  then  went  on  pathetically  to  ask  the  Chamber  of 
Commerce  to  understand  that  it  is  very  difficult  for 
a  Parliamentary  representative  to  resist  the  wishes 
of  a  municipality  upon  a  matter  so  nearly  affect- 
ing municipal  interests."  Mr.  Davenport  added: 
"We  are  asked  to  do  this  at  the  bidding  and  at 
the  instigation  of  an  Association  of  Municipal 
Corporations,  scattered  all  over  the  country,  some 
of  whom  are  interested  in  gas  undertakings  .  .  . 
some  of  whom  have  electric  supplies  of  their  own 
at  a  cost  to  the  consumer  in  every  case  higher  than 
the  maximum  which  is  permitted  under  this  Bill, 
and  others  of  whom  neither  have,  nor  propose  to 
have,  any  electric  supply,  but  who  combine  with 
other  corporations  in  a  spirit  of  friendship  and 
sympathy  and  brotherly  affection  when  the  sacred 
rights  of  municipal  monopoly  are  threatened  with 
the   possibility   of    competition    by   private    enter- 


274    MUNICIPAL  OWNERSHIP   IN   GREAT  BRITAIN 

prise.  .  .  .  The  influence  of  the  corporations 
has  been  very  strong  in  this  House,  but  I  cannot 
refrain  from  saying  that  I  think  it  will  be  well  if 
they  are  careful  that  that  influence  is  not  exercised 
unduly  and  excessively,  as  I  think  it  has  been  in 
connection  with  this  Bill.  I  do  not  mean  the 
influence  of  an  individual  Municipality  which  is 
brought  to  bear  upon  its  Parliamentary  represent- 
ative with  respect  to  a  measure  of  local  interest. 
No  one  would  object  to  that.  .  .  .  But  I  refer 
to  the  combined  and  concerted  influence  of  the 
Association  of  Municipal  Corporations  which  is 
brought  to  bear  on  an  individual  member  of  this 
House  for  the  purpose  almost  of  compelling  him 
to  vote  for  or  against  a  Bill,  which,  as  a  matter  of 
fact,  possibly  may  not  concern,  even  in  the  remot- 
est degree,  the  constituency  which  he  represents. 
That  is  the  kind  of  influence  which  during  the  past 
few  weeks  has  been  brought  to  bear  on  honorable 
Members  of  this  House,  and,  while  I  resent  it,  I 
recognize  its  force,  and  I  recognize  that  it  is  likely 
enough  to  be  successful." 

Mr.  Pickersgill  seconded  Mr.  Stuart  Wortley's 
motion  with  the  words:  "Lastly,  the  promoters  of 
this  Bill  point  to  the  experience  of  America.  .  .  . 
I  think  the  reference  to  the  United  States  is  singularly 
unfortunate,  because  it  is  notorious  that  the  United 
States  have  become  the  prey  of  monopolist  com- 
panies.   It  is  because  I  believe  the  ultimate  effect 


MUNICIPALITIES   versus  MANUFACTURER       275 

of  this  Bill  must  be  to  put  large  areas  in  England, 
interspersed  among  which  are  great  industrial  areas, 
under  the  control  and  at  the  mercy  of  a  dividend- 
earning  company,  that  I  very  heartily  second  the 
amendment."  Mr.  Pickersgill  had  been  in  the  Civil 
Service  before  he  entered  Parliament.  He  repre- 
sented Bethnal  Green,  a  Metropolitan  (London)  Bor- 
ough of  130,000  people,  which  enjoyed  the  distinction 
of  having  no  electric  light  in  this  year  1905. 

Mr.  C.  P.  Ritchie,  President  of  the  Board  of  Trade 
from  1895  to  1900,  said :  "I  came  down  to  the  House 
prepared  to  recommend  the  rejection  of  the  Bill  if 
it  remained  in  the  shape  in  which  it  was  introduced. 
It  seemed  to  me  the  principle  of  the  Bill  was  a 
direct  attack  on  the  rights,  privileges,  and  duties 
of  Municipal  Corporations,  and  whatever  might 
have  been  the  contingent  advantages  (to  Great 
Britain's  trade  and  industry)  which  might  accrue 
in  consequence  of  the  passage  of  this  Bill,  I  should 
have  been  bound  to  tell  the  House  I  did  not  think 
it  would  be  wise  in  passing  a  Bill  which  practically 
set  aside  the  existing  law  which  adequately  pro- 
tects corporations  in  the  exercise  of  the  duties 
which  they  have  to  discharge.  Any  private  Bill 
of  that  kind  which  sets  aside  rights  which  corpo- 
rations have  by  law  ought  to  be  rejected.  But, 
Sir,  it  seems  to  me  that  my  honorable  Friend  (Mr. 
Davenport)  who  has  spoken  on  behalf  of  this 
Bill  has  practically  removed  all  the  difficulties  which 


276    MUNICIPAL  OWNERSHIP  IN   GREAT   BRITAIN 

are  felt  in  connection  with  the  second  reading." 
It  is  scarcely  necessary  to  add  that  Mr.  Ritchie's 
argument  contained  several  unsupportable  assump- 
tions. Parliament  had  not  imposed  on  the  local 
authorities  the  duty  of  supplying  electric  current; 
it  merely  had  authorized  local  authorities  to  assume 
that  duty.  Moreover,  the  Government  had  not 
obliged  local  authorities  to  execute  it,  even  after 
they  had  assumed  it.  Finally,  Parliament  had  not 
promised  exemption  from  competition  to  such 
local  authorities  as  should  elect  to  go  into  the  busi- 
ness of  supplying  electric  current. 

The  last  speaker  to  the  motion  to  reject  the 
BUI,  Mr.  H.  J.  Wilson,  a  director  of  the  Sheffield 
Smelting  Co.,  who  describes  himself  as  "a  Radical, 
strongly  opposed  to  .  .  .  any  form  of  Protection," 
said:  ''Representing  a  constituency  containing  a 
very  considerable  number  of  small  Urban  Dis- 
tricts, I  wish  to  be  allowed  to  say  that  I  have  re- 
ceived very  many  protests  against  this  Bill,  expres- 
sive of  an  urgent  desire  that  it  should  not  be  allowed 
to  pass."  * 

Before  the  Select  Committee  on  Municipal  Trad- 
ing, Mr.  D.  H.  Davies,  Secretary  of  the  Chesterfield 
Chamber  of  Commerce,  stated  that  the  manufacturers 
Needs  of  the  of  the  Chesterfield  district  were  ex- 
Manufacturers      poseoi  to  fae  competition  of  German 

and    other    foreign    manufacturers    who    had    the 

*  Hansard's  Parliamentary  Debates,  March  3,  1899. 


MUNICIPALITIES   versus  MANUFACTURER       277 

advantage  of  relatively  cheap  electrical  power  ob- 
tained from  central  electric  stations.  Many  Chester- 
field manufacturers  had  sought  to  help  themselves 
by  installing  their  own  electrical  plants,  but  such 
plants  could  not  supply  as  cheaply  as  central  stations. 
He  added  that  the  Chesterfield  corporation,  which 
owned  the  local  gas  plant,  had  taken  out  an  electric 
light  charter  in  1894,  but  that  in  1898  it  had  done 
nothing  more  than  take  two  or  three  polls  of  the 
electors  with  a  view  to  determining  what  to  do  with 
the  charter.  Speaking  of  the  defeat  of  the  General 
Power  Distribution  Bill,  Mr.  D.  H.  Davies  said  that 
the  promoters  had  spent  $50,000  in  Parliamentary 
fees  in  carrying  the  Bill  to  the  Second  Reading  stage. 
He  added:  "It  has  been  within  my  own  experience 
that  this  kind  of  opposition  to  private  enterprise  has 
driven  away  capitalists,  who  have  preferred  to  go  into 
large  enterprises  of  a  similar  character  in  foreign 
countries.  They  fear  not  merely  the  expenses  of 
the  fight  in  Parliament,  and  the  risk  of  it,  but  they 
fear  also  the  hostile  attitude  of  the  local  authorities 
would  be  continued  if  they  (the  capitalists)  should 
get  charters  from  Parliament.  Of  course,  the  local 
authorities  have  great  power  (to  harass  companies) 
with  their  street  by-laws,  in  one  way  or  another,  and 
that  is  a  very  serious  consideration."  * 

In  the  year  1900,  the  Lancashire  Electric  Power 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900; 
q.  2586  to  2601. 


278      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

Co.  asked  Parliament  for  authority  to  supply  cur- 
rent in  an  area  of  iooo  square  miles  in  Lancashire. 
The  company  agreed  to  bind  itself  not  to  supply  cur- 
rent within  any  local  government  area,  whether 
municipal,  urban,  or  rural,  except  with  the  express 
consent  of  the  local  authority  concerned.  The  pro- 
posed scheme  covered  129  local  authorities  and  182 
townships,  of  which  only  16  had  central  electric 
stations  in  operation,  supplying  current  on  a  small 
scale  to  a  small  number.  Manchester,  for  example, 
which  had  acquired  a  charter  in  1900,  was  serving 
3228  customers  in  a  population  of  631,000,  the 
average  customer  having  100  lamps  of  8  candle 
power.  Twenty-two  other  local  authorities  were 
merely  sitting  on  their  charters,  having  been  thus  en- 
gaged, in  some  instances,  for  not  less  than  ten  years. 
In  91  local  authority  districts  no  applications  for 
Provisional  Orders  had  been  made.  * 

In  1900,  six  local  authorities  adjoining  Manchester 
had  transferred  their  electric  lighting  charters  to  that 
city,  which  was  supplying  current  under  those 
charters.  The  city  had  reduced  the  average  charge 
per  unit  of  current  sold,  from  10.26  cents  in  1896,  to 
6.48  cents  in  1900;  but  it  had  not  succeeded  in 
reducing  the  cost  of  manufacture  per  unit  sold,  which 
had  been  3.76  cents  in  1896,  and  was  3.68  cents  in 
1900.     On  the  other  hand,  the  maximum  charges 

*  Hansard's  Parliamentary  Debates,  March  i,  1900;  Mr.  Seton- 
Karr;   and  Garcke:  Manual  of  Electric  Undertakings,  Vol.  V. 


MUNICIPALITIES  versus  MANUFACTURER       279 

of  the  proposed  company  were  to  be  10  cents  for  the 
first  200  hours,  6  cents  for  the  second  200  hours,  and 
after  that,  3  cents.  The  city  of  Manchester  was 
anxious  that  still  other  adjoining  local  authorities 
should  transfer  their  electric  light  charters  to  it. 
But  if  the  Bill  should  pass,  the  Lancashire  Power 
Co.  would  become  a  competitor  of  the  city  for 
the  transfer  of  those  charters. 

On  January  27,  1900,  the  Lord  Mayor  of  Man- 
chester convened  a  meeting  of  local  authorities,  to 
consider  what  steps  should  be  taken  to  defeat  the 
Second  Reading  of  the  Bill  in  the  House  of  Com- 
mons. On  May  4,  1900,  the  Association  of  Munici- 
pal Corporations  met  to  consider  how  they  could 
influence  the  Select  Committee  to  which  had  been 
referred  the  Lancashire  Power  Co.  Bill. 

In  the  House  of  Commons  itself,  the  debate  upon 
the  Bill  was  opened  by  Mr.  Macdona,  who  stated 
that  he  had  voted  against  the  General  Power  Dis- 
tribution Co.  Bill,  in  1899;  but  that  he  could 
see  nothing  objectionable  in  the  Lancashire  Power 
Bill,  since  that  measure  did  not  propose  to  interfere 
in  the  slightest  degree  with  any  local  authority, 
municipal,  urban,  or  rural,  retaining  the  exclusive 
right  to  supply  its  constituents,  should  it  so  elect. 
He  added:  "There  is  a  feeling  in  the  country  that 
the  municipalities  are  organizing  themselves  into  a 
gigantic  monopoly  with  a  view  to  strangling  private 
enterprise  in  regard  to  the  supply  of  electricity  at 


280     MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

the  moment  of  its  birth.  .  .  .  There  is  also  a 
feeling  in  the  country  that  fair  play  has  not  been 
accorded  to  private  commercial  enterprise  in  this 
matter  in  its  competition  with  the  municipalities." 
After  the  opponents  of  the  Bill  had  spoken, 
Mr.  Macdona  resumed  the  debate  with  the  words, 
"Is  it  not  clear  from  this  that  the  kind  of  competi- 
tion (now)  objected  to  by  the  large  towns  is  not 
competition  within  their  own  areas  (which  the  Bill 
enables  them  to  prevent),  but  competition  in  the  sup- 
ply to  outside  townships?" 

The  opponents  of  the  Bill  had  no  arguments  and 
were  compelled  to  have  recourse  to  misleading  state- 
ments and  to  tirades  against  "dividend-seeking" 
The  Appeal  companies.     They  addressed  not  the 

to  Prejudice  House  of  Commons,  but  the  constitu- 

encies of  that  House,  upon  whose  intelligence  they 
set  a  low  value  indeed.  Their  object  was  to  create 
among  the  constituencies  such  a  feeling  against  the 
Bill  that  it  would  be  difficult  for  Members  of  Par- 
liament to  vote  for  the  Bill.  Mr.  Galloway,  M.P.  for 
Manchester  and  Director  of  the  Great  Eastern  Rail- 
way, moved  the  rejection  of  the  Bill.  He  caused 
Mr.  Ritchie,  President  of  the  Board  of  Trade,  to 
jump  to  his  feet,  with  the  words:  "That  is  a  most 
garbled  report  of  what  I  said  (in  1899),  and  I 
think  the  quotation  is  most  unjustifiable."  Mr. 
Galloway  continued  the  debate  with  the  statement 
that  the  Bill  proposed  a  sliding  scale  of  price  and 


MUNICIPALITIES  versus  MANUFACTURER       281 

dividend,  under  which,  starting  from  a  maximum 
price  for  current  and  a  maximum  cumulative  divi- 
dend of  10  per  cent,  the  company  should  be  al- 
lowed to  increase  that  maximum  dividend  by  one 
per  cent  every  time  it  reduced  its  charge  for  current 
by  five  per  cent.*  "  How  such  a  scheme  is  going  to 
benefit  the  ratepayers  or  the  communities  who  re- 
quire electricity,  I  entirely  fail  to  see.  .  .  .  The 
great  point  is  that  by  the  company  taking  these 
compulsory  powers  (to  break  up  streets  for  the 
purpose  of  laying  mains)  by  Act  of  Parliament,  the 
corporations  themselves  will  not  derive  one  penny 
of  profit  or  any  advantage  whatever  from  the  break- 
ing up  of  their  streets." 

Sir  James  T.  Woodhouse,  the  representative  in 
the  House  of  Commons  of  the  Association  of  Mu- 
nicipal Corporations,  seconded  the  motion  to  reject 
the  Bill.  He  said,  "The  promoters  of  the  measure 
were  not  a  public  authority  seeking  public  rights  at  the 
hands  of  the  House  of  Commons,  but  a  body  of  pri- 
vate speculators  primarily  desirous  of  pecuniary 
gain,  but  presenting  their  case  as  one  of  public  policy 
and  as  satisfying  a  great  and  pressing  public  de- 
mand." 

Mr.  Broadhurst,  M.P.  for  Leicester,  said:  "The 
Bill  is  not  a  philanthropic  measure,  but  the  venture 

*  The  Act  as  passed  provides  for  a  dividend  of  8  per  cent  and  "  an 
additional  1.25  per  cent  reduction  in  price  for  every  0.25  per  cent  in- 
crease of  dividend  above  8  per  cent  in  respect  of  every  5  per  cent  charged 
below  the  maximum  price  allowed  by  the  Act." 


282       MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

of  a  body  of  private  persons  for  the  sake  of  gain. 
It  was  a  sort  of  Chartered  Company  scheme  by 
which  the  promoters  saw  a  good  opportunity  to 
obtain  certain  rights  which  at  present  belong  to  other 
people,  and  if  the  Bill  were  to  be  passed,  the  small 
municipalities  of  the  country  would  be  handed  over 
to  the  hands  of  persons  whose  only  idea  was  to  ac- 
cumulate vast  fortunes  out  of  the  necessities  of  the 
people."  Mr.  Broadhurst  represented  Leicester,  a 
city  of  224,000  people.  The  city,  which  owned  the 
gas  works,  had  begun  to  supply  electric  current  in 
1894.  In  July,  1900,  the  city  had  793  electric  cur- 
rent customers,  who  used  on  an  average  70  lamps  of 
8  candle  power,  and  paid  8.44  cents  per  unit  of  current. 
Sir  William  Vernon  Harcourt  replied:  "I  do  not 
altogether  share  my  honorable  Friend's  objections  to 
great  enterprises  being  carried  on  through  private 
sources.  That  was  a  question  which  occupied  fifty 
or  sixty  years  ago  the  attention  of  this  country,  and 
that  was  at  the  time  of  the  commencement  of  the 
great  railway  interest.  That  question  was  decided  by 
the  wisdom  of  the  great  statesman,  Sir  Robert  Peel. 
We  know  that  Sir  Robert  was  much  attacked  at 
that  time  for  throwing  the  railway  enterprise  of  this 
country  into  private  hands,  and  not  adopting  the 
system  so  largely  followed  on  the  Continent.  I 
look  forward  to  this  question  of  electricity  and  elec- 
tric supply  as  the  great  question  of  the  future,  and 
it  is  from  that  point  of  view  that  I  wish  to  refer  to 


MUNICIPALITIES  versus  MANUFACTURER       283 

the  subject.  .  .  .  No  man  can  say  to-day  what 
part  electricity  may  not  play  in  the  industry  of  the 
country,  and  that  is  a  point  which  the  House  of 
Commons  should  keep  in  mind."  He  concluded 
with  the  statement  that  Parliament  dealt  with  the 
great  questions  of  railways  by  laying  down  general 
rules  under  the  observance  of  which  private  enter- 
prise was  given  full  scope.  Parliament  did  not  ask 
promoters  to  take  their  chances  with  Private  Bill 
Committees  —  nor,  he  might  have  added,  with  a 
Board  of  Trade  that  since  1870  never  has  missed  a 
chance  to  throw  the  great  weight  of  its  authority 
on  the  side  of  municipal  activity  and  against  private 
enterprise. 

Mr.  Ritchie,  President  of  the  Board  of  Trade, 
said:  "It  is  true,  I  think,  that  the  electrical  enter- 
prise of  this  country  is  in  an  exceedingly  backward 
condition;  it  is  inferior  with  regard  to  light,  and 
certainly  with  regard  to  the  conveyance  of  power 
to  many  European  countries,  and  it  is  greatly  inferior 
to  the  United  States  and  Canada.  It  may  almost 
be  said  that  there  are  villages  in  the  United  States 
which  are  in  possession  of  advantages  in  connection 
with  electricity  which  some  of  our  largest  towns  do 
not  possess.  It  cannot  be  doubted  that  there  is  a 
great  demand  for  something  to  be  done.  ...  It 
must  be  remembered  that  it  was  the  Act  of  1882 
which  more  than  anything  else  had  delayed  and 
hampered   the  development   of  electrical   supply." 


284      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

This  statement  came  from  the  man  who  was  unwill- 
ing in  1900,  as  he  had  been  in  1899,  that  power  com- 
panies should  have  the  right  to  compete  with  the 
local  authorities  in  their  areas  in  furnishing  current 
at  wholesale  for  power  purposes,  "whatever  might 
be  the  contingent  advantages  (to  British  industry, 
hard  pressed  by  the  competing  industries  of  Belgium 
and  Germany)." 

The  Lancashire  Power  Bill  was  passed  after  Man- 
chester, Salford,  Bootle,  and  Stockport  had  persuaded 
the  Committee  of  the  House  of  Lords  to  insert  a 
clause  to  the  effect  that  the  cities  in  question  should 
have  no  power  to  take  current  from  the  company, 
even  if  they  should,  at  some  future  date,  change  their 
minds  and  desire  to  take  current.  For  the  rest,  the 
company  may  sell  current  in  bulk  to  local  authorities 
and  to  companies  holding  Provisional  Orders.  The 
company  may  itself  obtain  charters  for  local  areas, 
if  it  can  persuade  the  local  authorities  to  give  consent, 
or  can  persuade  the  Board  of  Trade  to  overrule 
local  authorities  that  are  unreasonably  withholding 
consent. 

The  Lancashire  Company's  area  is  1000  square 
miles.  In  it  are  a  large  number  of  collieries,  engi- 
neering works,  cotton  mills,  and  numerous  other 
Parliamentary  industries  which  have  in  use  steam 
Grant  rendered  engines  aggregating  over  1,000,000 
horse  power.  The  directorate  is  very 
strong,  being  composed  of  the  so-called  "  Edmund- 


MUNICIPALITIES  versus  MANUFACTURER       285 

son  group,"  who  have  been  very  successful  with 
the  lighting  of  a  number  of  small-sized  and  moderate- 
sized  towns.  The  company  has  an  authorized  capital 
of  $15,000,000,  with  power  to  borrow  $5,000,000. 
But  the  difficulty  of  obtaining  Provisional  Orders, 
which  would  permit  the  company  to  supply  cur- 
rent direct  to  consumers,  as  well  as  the  difficulty  of 
inducing  local  authorities  to  take  current  in  bulk, 
have   thus  far  proven  all  but  insurmountable.     In 

1900,  the  company  had  contemplated  the  erection  of 
four  generating  stations.  In  February,  1905,  the 
company  was  completing  its  first  station,  which 
is  to  contain  initial  plant  capable  of  supplying  about 
6000  horse  power.* 

Among  the  Power  Acts  passed  in  1901,  was  the 
Act  of  the  Derbyshire  and  Nottinghamshire  Elec- 
tric Power  Co.  That  Act  was  a  revival  of  the 
General  Power  Distribution  Bill  which  had  been 
defeated  in  1899.  The  promoters  stated  that  they 
represented  manufacturers  who  had  invested  in  their 
enterprises  $1,000,000,000.  There  was  opposition 
from  the  local  authorities  of  Derby,  Mansfield, 
Chesterfield,  Warsop,  and  various  urban  districts. 
But  on  the  whole  the  opposition  to  this  Bill  was  less 
determined  than  that  to  the  other  Bills  passed  in 

1901,  "apparently  because  of  the  prevalent  impres- 
sion that  nothing  but  a  comprehensive  scheme  for 

*  Garcke:  Manual  of  Electrical  Undertakings,  Vol.  VI;  and  The 
Engineering  Magazine,  February,  1905. 


286       MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

supplying  cheap  power  could  restore  some  of  the 
decaying  industries  which  have  been  domiciled  in 
this  district  for  a  very  long  period."  *  The  only 
points  really  fought  involved  the  extent  of  the  protec- 
tion to  be  given  to  towns  having  municipal  electric 
plants.  The  company  will  erect  four  generating  sta- 
tions, to  supply  an  area  of  1570  square  miles.  It 
has  power  to  raise  $9,000,000  by  the  issue  of  stock, 
with  the  power  to  borrow  $3,000,000. 

The  most  important  power  scheme  authorized  in 
1 90 1  was  that  of  the  Yorkshire  Electric  Power 
Co.,  covering  the  whole  of  the  Smith  Yorkshire 
manufacturing  and  colliery  districts,  an  area  of 
1800  square  miles.  The  promoters  of  the  Bill 
numbered  63,  and  they  included  a  number  of  the 
leading  representatives  of  industry,  who  intended 
themselves  to  become  large  consumers.  The  list 
of  the  promoters  contained  such  names  as  Armitage, 
Blackhouse,  Baines,  Brotherton,  Crawshag,  Fox, 
Green,  and  Holliday.  The  corporations  of  Leeds, 
Bradford,  and  Sheffield  made  a  stubborn  fight  to 
prevent  the  company  obtaining  right  of  way  for  its 
underground  mains  through  their  respective  areas 
for  the  purpose  of  reaching  certain  other  areas  that 
wished  to  be  supplied.  As  the  boundaries  of  Leeds 
and  Bradford  touch,  this  opposition,  if  successful, 
would  have  meant  the  creation  of  an  island  18  miles 
in  length  in  the  centre  of  the  area  of  supply,  and  that 

*  Garcke :  Manual  of  Electric  Undertakings,  Vol.  VI,  p.  6. 


MUNICIPALITIES   versus  MANUFACTURER       287 

would  have  placed  most  serious  engineering  difficul- 
ties in  the  way  of  the  economical  operation  of  the 
four  proposed  generating  stations.  The  prohibi- 
tion to  pass  through  the  territory  of  Sheffield  would 
have  prevented  the  Yorkshire  Co.  from  joining  its 
supply  with  that  from  the  Derbyshire  and  Notting- 
hamshire Co.'s  mains.  Of  course,  the  York- 
shire Co.  did  not  propose  to  supply  in  Bradford, 
Leeds,  or  Sheffield.  Moreover,  it  proposed  that 
the  city  authorities  in  question  should  select  the 
route  which  the  mains  should  follow,  and  should,  at 
the  expense  of  the  company,  themselves  lay  the  mains. 
The  local  authorities  talked  the  usual  "moonshine" 
about  losing  control  of  the  streets  —  to  use  a  phrase 
employed  in  1886  by  Lord  Bramwell,  a  member  of 
the  Lords  Committee  of  that  year  *  —  but,  as  a  mat- 
ter of  fact,  they  were  actuated  solely  by  the  desire 
to  cripple  the  Yorkshire  Co.  They  feared  that 
the  power  companies  would  undersell  the  munici- 
pal electric  light  plants;  and  that  the  manufac- 
turers located  within  the  city  limits  would  not  long 
put  up  with  having  to  pay  more  for  power  and  light 
than  was  paid  by  the  manufacturers  located  outside 
of  the  city  limits.    Their  fears  were  well  grounded. 

*  Report  of  Lords  Committee  on  the  Electric  Light  Act,  1882,  Amend- 
ment Bills,  1886;  q.  1805.  Lord  Bramwell  to  Sir  George  Morrison, 
Town  Clerk  of  Leeds :  "You  said  that  the  electric  light  companies  come 
to  Parliament  for  certain  powers,  and  therefore  they  ought  to  give  a 
quid  pro  quo.  I  quite  agree,  if  they  come  to  Parliament  for  certain  pow- 
ers, Parliament  is  bound  to  make  the  best  bargain  that  it  can  with  them; 
but  as  to  the  breaking  up  of  the  streets,  I  believe  it  is  all  moonshine; 
the  better  reason  is  that  Parliament  can  do  it." 


288      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

To-day  power  companies  are  "  offering  prices  for  a 
combined  lighting  and  power  supply  such  as  the  mu- 
nicipalities have  not  even  thought  of  —  for  instance, 
in  the  neighborhood  of  Manchester,  contracts  are 
being  made  by  a  power  company  at  prices  varying 
between  i  cent  and  1.5  cents  per  unit."*  In  1903, 
Manchester  was  charging  for  power,  from  3.75  cents 
to  2  cents. 

In  the  course  of  the  deliberations  of  Parliament 
upon  the  policy  to  be  adopted  by  Parliament  in  the 
matter  of  power  companies,  the  Board  of  Trade  con- 
Board  of  Trade  tinued  the  policy  of  throwing  its  great 
sides  with  weight  on  the  side  of  the  municipali- 

MunicipaMes       ties   and   agamst    private   enterprise. 

In  1898,  before  a  Select  Committee  of  Parlia- 
ment, Sir  Courtenay  Boyle,  Permanent  Secretary  of 
the  Board  of  Trade  from  1893  to  1901,  argued  in 
favor  of  the  policy  of  compulsory  sale  of  these  great 
power  undertakings  at  structural  value.  Sir  Courte- 
nay Boyle  took  a  decided  stand  on  this  question  of 
public  policy,  though  he  himself  admitted  that 
liability  to  compulsory  sale  would  restrict  private 
enterprise  "to  a  certain  extent,  but  only  to  a  certain 
extent."  He  also  admitted  that  "he  was  not  quite 
sure "  that  the  privilege  of  purchase  at  structural 
value  would  "be  very  valuable  to  the  local  authori- 
ties," and  that  he  himself  had  no  clear  notion  how 

*  The  Municipal  Journal,  June  30,  1905;   report  of  an  address  by 
Mr.  Hodgson,  Deputy  Chairman  Salford  Electricity  Committee. 


MUNICIPALITIES  versus  MANUFACTURER        289 

to  overcome  the  difficulty  arising  from  the  fact  that 
it  would  not  be  expedient  or  practicable  to  give  any- 
one local  authority  the  power  to  purchase  an  under- 
taking covering  the  areas  of  many  municipalities."  * 

In  the  period  from  1900  to  1904,  twenty-four  supply 
companies  were  authorized.  The  terms  upon  which 
the  charters  have  been  granted  have  depended 
mainly  upon  the  degree  of  opposition  exercised  by 
the  local  authorities  concerned.  The  less  favorable 
terms  are  known  as  the  "Lancashire"  terms.  They 
authorize  the  power  company  to  supply  in  bulk  to 
local  authorities  and  companies  holding  Provisional 
Orders,  and  to  supply  directly  to  consumers  in  case 
the  power  company  can  acquire  a  local  Provisional 
Order.  The  more  favorable  terms  are  known  as 
"South  Wales"  terms.  They  authorize  the  power 
company  to  supply  energy  in  bulk  to  "authorized  dis- 
tributers," —  that  is,  holders  of  Provisional  Orders, — 
and  to  supply  current  directly  to  any  person  for  power 
purposes,  and  current  for  lighting  any  premises  on 
some  part  of  which  the  power  is  utilized,  provided 
that  in  both  cases  in  a  local  area  where  a  local  au- 
thority or  a  company  holds  a  charter,  the  consent  of 
the  holder  of  that  charter  is  first  obtained.  If  such 
consent  is  withheld,  the  Board  of  Trade  may  dis- 
pense with  it,  if,  in  the  opinion  of  that  body,  the  holder 

*  Report  oj  Committee  on  Electricity  Generating  Stations  and  Supply, 
1898;  q.  2066  to  2069. 


290    MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

of  the  charter  is  not  willing  and  in  a  position  to  give 
the  requisite  supply  to  the  power  user  upon  reason- 
able terms  and  within  a  reasonable  time.* 

All  power  companies  that  obtain  Provisional 
Orders  authorizing  them  to  supply  current  directly 
to  consumers,  are,  of  course,  subject  to  the  provision 
which  gives  the  local  authority  concerned  power  to 
purchase,  at  structural  value  at  the  end  of  forty-two 
years,  the  distributing  mains  and  other  property  lying 
within  the  local  authority's  area. 

In  the  years  1903  to  1905,  the  Government  three 
times  introduced  into  Parliament,  and  three  times 
withdrew,  the  so-called  Electricity  Supply  Bill,  a 
Parliament  help-  measure  designed  to  give  effect  to  the 
less  before  the  recommendations  of  the  Lords  Com- 
Municipaiities  mittee  of  ^g  on  Electricity  Gener- 
ating Stations  and  Supply.  The  Bill  authorized 
the  Board  of  Trade  to  issue  Provisional  Orders 
to  power  companies  for  supplying  current  in  bulk  to 
"authorized  distributers"  —  that  is,  to  companies  or 
local  authorities  holding  Provisional  Orders.  It 
repealed  the  provisional  veto  of  local  authorities 
in  the  matter  of  Provisional  Orders  for  electric 
lighting,  as  well  as  for  supply  of  current  in  bulk. 
It  gave  the  Board  of  Trade  discretionary  power 
to   insert  or   to  omit  from  Provisional  Orders  for 

*  Report  from  Joint  Select  Committee  on  Municipal  Trading,  1900;  q. 
2346;  Mr.  A.  Bonham-Carter,  Referee  of  Private  Bills,  House  of  Com- 
mons, 1866  to  1903. 


MUNICIPALITIES  versus  MANUFACTURER       291 

supply  in  bulk  provision  for  compulsory  purchase. 
It  protected  the  consumer  by  providing  that  at  the 
end  of  every  five-year  period  any  twenty  consumers 
could  petition  the  Board  of  Trade  to  fix  new  maxi- 
mum charges  for  the  supply  of  current;  and  upon 
such  petition  the  Board  of  Trade  was  to  have  power 
to  fix  new  rates,  if  it  deemed  the  existing  rates  un- 
reasonable. In  1903,  the  Bill  did  not  get  beyond 
the  first  Reading  in  the  House  of  Lords.  In  the 
following  year  it  passed  in  the  House  of  Lords,  but 
the  issue  of  The  Electrician,  a  weekly  newspaper, 
which  announced  that  the  Bill  had  passed  in  the 
House  of  Lords,  announced  also  that  the  Govern- 
ment had  withdrawn  the  Bill.  In  1905  the  Bill 
was  once  more  accepted  by  the  Lords.  But  the 
Government  refused  to  try  to  put  it  through  the 
Commons,  on  the  ground  that  it  was  a  measure 
"not  uncontroversial,"  and  that  consequently,  there 
was  not  time  to  take  it  up.  * 

At  the  close  of  the  Session  of  1905,  Parliament 
had  not  amended  the  Tramway  Act,  1870,  the  Elec- 
tric Lighting  Act,  1888,  or  the  Light  Railways  Act, 
1896. 

The  reason  why  the  Government  did  not  care,  in 
1905,  to  take  up  in  the  House  of  Commons  a  con- 
troversial electricity  supply  Bill  is  explained  by  the 
fate  of  the  Administrative  County  of  London  Electric 
Power  Bill,  which  passed  the  House  of  Lords,  but 

*  The  Municipal  Journal,  July  21,  1905. 


292    MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

was  talked  to  death  in  the  House  of  Commons. 
Sixteen  Boroughs  and  thirteen  companies  hold 
Provisional  Orders  for  Metropolitan  London.  To 
protect  those  authorized  distributers,  the  Lords  in- 
serted in  the  Bill  the  provision  that  the  power  com- 
pany should  not  supply  within  an  area  held  by  an 
existing  authorized  distributer,  unless  it  was  proved 
to  the  satisfaction  of  the  Board  of  Trade  that  it 
could  supply  more  cheaply;  and  then  the  existing 
authorized  distributer  was  to  have  the  option  of 
taking  the  current  required  from  the  power  com- 
pany at  a  price  which  would  leave  the  authorized 
distributer  a  reasonable  profit.  This  clause  caused 
most  of  the  companies,  if  not  all  of  them,  and 
some  of  the  Boroughs,  to  withdraw  their  opposi- 
tion to  the  Bill.  But  it  did  not  modify  the 
opposition  of  the  London  County  Council,  which 
hoped  at  some  future  date  to  obtain  power  from 
Parliament  to  buy  out  the  existing  authorized  dis- 
tributers and  acquire  a  monopoly  of  supplying 
electricity  in  Metropolitan  London.  For  the  pro- 
tection of  the  consumer  the  Bill  provided  that  the 
company  should  not  pay  its  standard  dividend  un- 
less its  average  receipts  per  unit  of  current  should  be 
1.5  cents.  For  every  1.25  per  cent  by  which  the 
average  receipts  per  unit  were  below  1.5  cents,  the 
dividend  might  be  increased  by  J-  of  1  per  cent.  On 
the  other  hand,  for  every  1.25  per  cent  by  which  the 
average  price  per  unit  of  current  sold  exceeded  1.5 


MUNICIPALITIES   versus  MANUFACTURER       293 

cents,  the  dividend  payable  was  to  be  reduced  by 
\  of  i  per  cent,  so  that  the  company  would  not  be 
allowed  to  pay  any  dividend  if  its  average  receipts 
per  unit  should  be  2.125  cents.  Moreover,  at  the 
expiry  of  each  period  of  five  years,  the  Board  of 
Trade,  upon  the  petition  of  twenty  consumers,  was 
to  have  the  right  to  revise  the  maximum  charges  to 
be  made.  The  Bill  also  contained  a  clause  authoriz- 
ing compulsory  purchase  by  some  public  body  at 
the  end  of  forty-two  years,  on  the  basis  of  the  audited 
capital  expenditure,  less  allowance  for  depreciation. 

Owing  to  the  proposed  adoption  of  large  turbo - 
units  the  estimated  capital  investment  per  kilowatt  to 
be  installed  was  $42.50.  The  actual  average  in- 
vestment per  kilowatt  installed  by  the  authorized 
distributers  had  been  $252.50;  which  explained  why 
the  average  charge  for  power  made  by  those  distrib- 
uters was  3.88  cents  per  unit. 

The  Bill  had  the  support  of  the  Great  Eastern 
Railway  Co.,  the  London  and  India  Docks,  and 
the  Surrey  Commercial  Docks,  employing  in  all 
100,000  persons.  The  railway  companies  declared 
that  the  possibility  of  their  obtaining  electrical  energy 
at  the  proper  price  without  their  having  to  install 
their  own  plants,  would  hasten  the  electrification  of 
that  part  of  their  railway  plant  which  served  the 
suburban  communities.  That,  in  turn,  would  make 
it  possible  to  supply  a  cheaper,  more  rapid,  and  more 
extensive  suburban  service. 


294     MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

Before  the  Select  Committee  of  the  House  of  Lords, 
Mr.  Alderman  Bussey,  who  represented  the  Bor- 
ough of  Poplar  (169,000  people),  stated  that  Poplar 
would  not  accept  current  from  a  company  at  a  rate 
lower  than  that  at  which  the  Poplar  municipal 
plant  could  generate.  The  Borough  of  Westminster 
(186,000  people)  also  objected  to  becoming  a  "mere 
distributer"  of  current  generated  by  a  company. 
At  the  time  of  these  statements  the  "works  cost"  of 
generating  current  in  the  eleven  municipal  plants  was 
$987,000,  whereas  the  company  was  prepared  to  fur- 
nish the  same  amount  of  current  for  $667,000,  or  68 
per  cent. 

The  Bill  was  talked  to  death  in  the  House  of 
Commons,  the  promoters  of  the  Bill  not  being  given 
a  chance  to  introduce  a  resolution  authorizing  them 
to  take  the  measure  up  in  the  next  Session.  If, 
therefore,  the  promoters  should  desire  to  take  up 
the  Bill  in  1906,  they  will  have  to  begin  all  over  — 
that  is,  incur  again  the  enormous  expense  of  pro- 
moting their  Bill  before  Committees  of  the  Lords 
and  the  Commons.  That  expense,  at  a  conserva- 
tive estimate,  will  be  not  less  than  $50,000.* 

The  level  of  the  debate  in  the  House  of  Commons 
is  illustrated  by  the  argument  of  Mr.  John  Burns, 

*  Garcke:  Manual  of  Electrical  Undertakings,  1904.  It  cost  the 
South  Wales  Electrical  Power  Distribution  Co.  no  less  than  $78,615 
in  parliamentary  fees  to  obtain  two  Special  Acts.  In  addition,  the 
Company  paid  $150,000  in  its  own  shares  and  debenture  stock  for 
' '  remuneration  for  obtaining  its  Acts,  and  preliminary  work  in  flotation 
of  the  Company." 


MUNICIPALITIES  versus  MANUFACTURER       295 

one  of  the  representatives  of  the  London  County 
Council.  Mr.  Burns  argued  that,  by  cheapening 
the  production  of  electric  current,  the  power  com- 
pany would  increase  the  number  of  the  unemployed.* 
In  June,  1904,  when  the  Government's  Supply  of 
Electricity  Bill  passed  the  second  reading  in  the 
House  of  Lords,  The  Municipal  Journal  wrote: 
"So  far  as  we  know,  no  journal  except  our  own  has 
yet  drawn  attention  to  the  dangerous  abrogation  of 
principle  which  is  at  the  back  of  this  measure.  In 
the  words  of  a  well-wisher  of  the  Bill,  'the  largest 
cities  and  towns  have  already  their  electricity  sys- 
tems and,  consequently,  they  have  no  reason  to 
oppose  the  Bill.  The  others  are  too  small  to  be  taken 
any  notice  of.'  So  far  everything  has  gone  as  this 
prediction  indicated.  There  has  been  no  opposition 
to  the  Bill,  and  the  Company  promoters  whose  in- 
terests it  is  intended  to  serve  have  lain  low,  hoping 
that  the  measure  will  be  through  Parliament  before 
anybody  knows  anything  of  its  provisions.  .  .  . 
Corporations  already  possessing  their  electricity  sup- 
plies are  entirely  wrong  in  assuming  that  the  measure 
does  not  affect  them.  It  will  affect  them  very  ma- 
terially. When  in  the  course  of  time  urban  dis- 
tricts are  able  to  obtain  their  current  at  about  half 
the  price  at  which  municipal  corporations  can  manu- 
facture it,  the  consumers  in  the  large  cities  and  towns 
will  no  longer  be  content  to  pay  the  larger  figure. 

*  Engineering,  August  11,  1905. 


296       MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

They  will  want  to  be  placed  on  equal  terms  with  the 
outside  districts,  and  they  will  have  justice  at  their 
backs.  What  then  will  become  of  our  city  and 
towns  (i.e.  municipal)  electricity  supply  systems?"* 
About  a  year  later,  in  May,  1905,  this  same  journal 
wrote:  "The  question  of  depreciation  has  reached 
an  acute  stage  with  many  of  the  (municipal)  under- 
Financiai  Weak-  takings  which  have  been  at  work 
ness  of  Municipal  about  ten  years.  It  was  the  custom 
Underta  tngs  0f  consuiting  engineers  in  those  days 
to  install  a  number  of  comparatively  small  gen- 
erating sets.  These  are  to-day  out  of  date,  and 
out  of  place,  for  they  not  only  are  wasteful  in  the 
space  occupied,  and  the  quantity  of  oil,  of  steam,  and 
magnitude  of  repairs,  but  even  at  their  most  econom- 
ical loads,  their  efficiency  falls  far  short  of  what  can 
be  obtained  from  plants  of  modern  design.  They 
are  an  admitted  incubus  to  an  undertaking,  an 
enigma  to  the  engineer  who  is  unlucky  enough  to 
have  them  on  his  hands.  The  problem  is  what  can 
be  done  with  them.  To  scrap  or  discard  these  'toys' 
is  a  luxury  few  places  can  afford,  inasmuch  as  the 
difference  between  their  original  cost  and  the  amount 
written  off  by  the  proportion  of  the  annual  sinking 
fund  payments  is  so  large  that  it  would  be  difficult 
to  obtain  sanction  from  a  (municipal  council)  com- 
mittee to  place  it  against  the  income  in  any  one  year. 
Yet  this  is  the  only  course  open  where  there  is  no 

*  The  Municipal  Journal,  June  17,  1904. 


MUNICIPALITIES   versus  MANUFACTURER       297 

reserve  or  depreciation  fund  to  meet  the  extraordinary 
expenditure.  Moreover,  the  only  way  in  which  the 
competition  of  the  bulk  power  supply  companies  can 
be  met  is  by  immediate  and  large  reductions  in  cost 
of  production.  ...  It  cannot  be  urged  too  strongly, 
or  reiterated  too  frequently,  that  the  real  problem 
facing  municipal  electrical  undertakings  is  a  financial 
one,  and  a  sound  and  well-considered  policy  should 
be  decided  upon,  and  consistently  adhered  to.  The 
time  has  come  when  a  few  large  generating  sets  of 
good  efficiency  tell  above  all  things  in  the  race  for 
success,  and  these  can  only  be  obtained  if  the  future 
has  been  foreseen  and  there  is  sufficient  capital  to 
cover  expenses."  * 

*  The  Municipal  Journal,  May  5,  1905. 


CHAPTER  XVII 

THE  MUNICIPALITIES  VerSUS  THE  WAGE-EARNERS 

The  foregoing  review  has  shown  that,  if  the  United 
Kingdom  were  as  well  supplied  with  street  railways 
and  central  electric  stations  as  are  the  United  States, 
British  Electrical  it  would  have  fully  four  times  the 
industries  out-  mileage  of  street  railway  track  that  it 
stripped  actually  has  and  at  least  three  times 

the  number  of  central  electric  stations.  Further- 
more, a  review  of  the  telephone  industry  in  the 
United  Kingdom  —  which  has  been  paralyzed  by  the 
British  Government,  largely  from  the  desire  to  pro- 
tect the  state  telegraph  system  against  competition 
from  the  telephone  —  would  show  that  the  people 
of  the  United  Kingdom  make  only  one-fifth  to  one- 
fourth  the  use  of  the  telephone  that  the  people  of  the 
United  States  make.  Finally,  a  review  of  the  in- 
dustries devoted  to  the  manufacture  of  electrical 
apparatus  and  supplies  would  show  that  the  paraly- 
sis of  those  industries  has  been  proportionate  to  the 
paralysis  of  the  street  railway,  central  electric  station, 
and  telephone  industries. 

298 


MUNICIPALITIES   versus  WAGE-EARNERS        299 

For  example,  before  the  first  Select  Committee  on 
Municipal  Trading,  1900,  Mr.  Garcke  stated  that 
the  four  or  five  leading  English  firms  manufacturing 
electrical  apparatus  and  supplies  had  a  subscribed 
capital  of  only  $10,000,000,  and  were  declaring 
average  dividends  of  4.5  per  cent  to  6  per  cent  only. 
On  the  other  hand,  the  four  or  five  leading  German 
firms  had  a  subscribed  capital  of  $65,000,000,  and 
were  declaring  dividends  of  10  per  cent  to  25  per 
cent.  The  witness  added:  "During  the  whole  of 
this  time  English  electrical  manufacturers  have  been 
hungering  for  orders  for  electrical  machinery,  but 
they  have  not  been  able  to  establish  large  factories 
because  they  have  not  known  what  was  to  be  the 
development  of  the  industry,  whether  it  was  coming 
on  or 'not.  Meanwhile  foreign  electrical  manufac- 
turers who  have  had  the  benefit  of  supplying  electric 
lighting  for  many  years  past,  and  the  Americans 
likewise,  have  been  able  to  establish  large  factories 
and  to  go  in  for  all  kinds  of  experimental  work,  and 
in  fact  to  develop  the  industry  in  every  way.  So 
that  when  pressure  was  afterward  put  upon  the  local 
authorities  to  go  on  with  their  Provisional  Orders 
or  drop  them  or  transfer  them  to  companies,  and 
they  finally  decided  to  go  on  with  them,  the  English 
manufacturing  companies  were  not  in  so  good  a 
position  as  the  foreign  manufacturers.  The  result 
is  that  a  very  large  proportion  of  the  electrical  ap- 
paratus is  now  being  imported  from  America.  .  .  . 


300    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

A  large  proportion  of  our  rails  comes  from  America, 
and  the  cars  likewise."* 

In  explanation  of  the  importation  of  rails,  it 
should  be  added  that  the  street  railway  demands  a 
special  rail.  The  large  market  in  the  United  States 
has  led  to  the  erection  of  rolling  mills  devoted  ex- 
clusively to  the  manufacture  of  street  railway  rails. 
Those  mills  work  much  more  cheaply  than  their 
English  competitors,  whom  the  small  British  market 
compels  to  treat  the  manufacture  of  street  railway 
rails  as  a  mere  side  issue. 

Some  indication  of  the  extent  to  which  the  demand 
for  labor  has  been  restricted  in  Great  Britain  by  the 
Loss  of  Employ-  practice  and  the  spirit  of  municipal 
ment  to  Wage-  ownership  is  to  be  obtained  by  com- 
earners  paring  the  number  of   wage-earners 

in  the  electrical  industries  of  Great  Britain  and  of 
the  United  States. 

There  were  in  the  United  States,  in  1902,  3620 
central  electric  light  stations,  employing  30,326  per- 
sons, or  an  average  of  8  persons  per  station.  In 
January,  1906,  there  were  in  the  United  Kingdom 
384  central  electric  stations,  f  If,  on  that  date,  the 
United  Kingdom  had  been  as  well  supplied  with 
central  electric  stations  as  were  the  United  States  in 
1902,  the  number  of  central  electric  stations  would 
have  been,  not  384,  but  1260.     Eight  hundred  and 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900 ; 
q.  1180  and  1181. 

t  The  Electrician,  January  12,  19,  26  and  February  2,  1906. 


MUNICIPALITIES   versus   WAGE-EARNERS        301 

seventy-six  additional  central  electric  stations,  on 
the  supposition  of  the  employment  of  8  persons  per 
station,  would  have  given  employment  to  7000  ad- 
ditional persons. 

In  1902,  there  were  in  the  United  States  21,302 
miles  of  street  railway  track,  giving  rise  to  the  em- 
ployment, on  the  average,  of  6.5  persons  per  mile  of 
track.  Had  the  urban  population  of  the  United 
Kingdom,  in  January,  1906,  been  as  well  supplied 
with  electric  street  railways  as  was  the  urban  popu- 
lation of  the  United  States  in  1902,  the  United 
Kingdom  would  have  had,  not  3040  miles  of  electric 
street  railway  track,*  but  14,000  miles.  Eleven 
thousand  additional  miles  of  electric  street  railway 
track,  on  the  supposition  of  an  average  of  6.5  per- 
sons per  mile,  would  have  given  employment  to 
71,500  additional  persons. 

There  were  in  the  United  States,  in  1900,  105 1 
villages,  towns,  and  cities  with  a  population  of  4000 
people,  or  more.  Of  these  places,  not  less  than  1002 
were  supplied  with  telephone  exchanges.  The  latter 
gave  employment  to  the  great  bulk  of  the  78,752 

*The  Electrician,  January  12,  19,  26,  and  February  2,  1906. 
Electric  Street  Railways  in  the  United  Kingdom 


January,  1906 
January,  1904 


Route 
Miles 


1970 
1770 


Track 

Miles 


3040 
2740 


802    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

persons  employed  in  the  telephone  business  in  1902.* 
On  the  other  hand,  there  were  in  the  United  Kingdom 
in  1 901  about  950  places  with  a  population  of  4000 
or  more  people.  Had  the  United  Kingdom,  in 
1905,  made  as  much  use  of  the  telephone  as  the 
United  States  had  made  in  1902,  it  would  have  had 
at  least  50,000  persons  employed  in  the  telephone 
business.  As  a  matter  of  fact,  there  were  in  1905 
only  13,000  persons  employed  in  the  telephone  busi- 
ness in  the  United  Kingdom.f 

The  figures  appertaining  to  the  telephone  business 
in  the  United  Kingdom  are  included  in  this  discus- 
sion for  the  reason  that  the  British  Government  for 
years  deliberately  paralyzed  the  telephone  business 
for  the  purpose  of  protecting  the  state  telegraphs 
from  competition  from  the  telephone.  When  the 
British  Government  became  ready  to  withdraw 
its  paralyzing  hand,  the  municipalities  prevented  that 
withdrawal.  This  matter  will  be  set  forth  at  length 
in  a  volume  soon  to  be  published. 

It  has  been  shown,  in  the  foregoing  discussion, 
that,  had  it  not  been  for  the  paralysis  of  industry 
inflicted  by  the  spirit  of  municipal  ownership  and 
state  ownership,  in  the  period  from  1870  to  1905, 
there  might  have  been  employed  in  gainful  occupa- 
tions, in  the  United  Kingdom,  in  1905,  some  115,000 
more  people  than  were  actually  so  employed.     In  the 

*  United  States  Census  Bulletin,  November  17,  1905. 
t  Hansard's  Parliamentary  Debates,  May  3,  1905;  p.  860;  Mr.  Kcir 
Hardie. 


MUNICIPALITIES  versus  WAGE-EARNERS        303 

aforesaid  period,  about  the  same  number  of  people 
have  been  compelled  to  emigrate  from  the  United 
Kingdom,  or  to  remain  in,  or  join,  the  ranks  of  the 
unemployed.  But  that  is  not  all.  Had  the  electric 
lighting  industry,  the  electricity  power  supply  indus- 
try, the  electric  street  railway  industry,  and  the  tele- 
phone industry  not  been  paralyzed  from  1870  to  the 
present  day,  the  industry  of  manufacturing  electrical 
machinery  and  apparatus  would  be  much  greater  than 
it  is.  It  would  have  a  larger  domestic  market  in  the 
United  Kingdom  itself;  and  it  would  be  in  a  much 
better  position  to  compete  with  the  United  States 
and  Germany  in  supplying  the  international  markets 
of  Europe,  South  America,  and  Australasia.  In 
1 90 1,  there  were  engaged  in  the  United  Kingdom  in 
the  manufacture  of  electrical  apparatus  a  total  of 
54,600  persons.  Had  the  United  Kingdom  not 
entered  upon  the  policy  of  Municipal  Ownership 
in  1870,  the  aforesaid  total  of  54,600  persons  would 
have  been  very  much  larger.* 

The  foregoing  figures  do  not  tell  the  whole  story. 
Some  industries,  such  as  the  production  of  pure  cop- 
per and  aluminum,  of  caustic  soda,  and  of  bleaching 

*The  Census  of  the  United  Kingdom  for  1901  shows:  — 


Industry 


Tramways 

Electricity  supply 

Gas  supply 

Manufacture  of  electrical  apparatus 


Persons 
Employed 


22,000 

3,600 

54,100 

54,600 


304    MUNICIPAL   OWNERSHIP  IN   GREAT  BRITAIN 

powder,  are  now  almost  exclusively  electrical  in- 
dustries. Precisely  in  so  far  as  Great  Britain's 
supply  of  cheap  electric  current  is  inferior  to  that  of 
Germany,  just  so  far  is  Great  Britain  handicapped  in 
producing  the  aforesaid  products  of  industry  for 
the  purpose  of  sale  in  the  world's  markets.  Again, 
in  Germany  the  belt  and  shaft  are  rapidly  disap- 
pearing from  the  factories,  and  machine  tools, 
looms,  etc.,  are  being  driven  by  separate  electric 
motors.*  All  of  these  things  tell  in  the  struggle 
between  England  and  Germany  in  the  world's  mar- 
kets. The  significance  of  that  struggle  lies  in  the 
fact  that  from  one-third  to  one-half  of  the  popula- 
tion of  Great  Britain  depends  for  its  daily  bread  upon 
the  export  of  British  manufactures.  Broadly  speak- 
ing, there  can  be  no  increase  of  the  population  in 
Great  Britain,  except  there  be  a  concurrent  increase 
in  the  export  of  British  manufactures. 

The  growth  of  the  electrical  industries  would  not 
only  increase  the  demand  for  labor,  but  would  also 
improve  vastly  the  health  and  the  comfort  of  the  wage- 
indired  Harm  to  earner.  The  growth  of  street  rail- 
Brituh  Wage-  ways  would  enable  the  wage-earner 
to  escape  from  the  congested  districts. 
But  the  electric  power  supply,  in  conjunction  with  the 
telephone,  would  help  the  wage-earner  still  more  by 
promoting  the  transfer  of  manufacturing  establish- 

*  Report  from  Select  Committee  on  Electricity  Generating  Stations  and 
Supply,  1898;  q.  926;  Mr.  J.  Swinburne;  and  Engineering,  January  20, 
1905. 


MUNICIPALITIES   versus  WAGE-EARNERS        305 

ments  from  the  centres  of  the  cities  to  the  suburbs, 
and  even  to  the  rural  belt  beyond  the  suburbs.  In 
this  connection  it  is  instructive  to  note  that  the  recent 
Royal  Commission  on  London  Traffic  reports  that, 
"The  provision  of  cheap  electrical  power  is  a  most 
potent  factor  in  the  direction  of  the  decentralization 
of  manufactories,  and  we  think  that  every  facility, 
both  legislative  and  municipal,  should  be  given  to 
that  end."  *  A  recent  report  from  one  of  the  British 
Consuls  stationed  in  Germany  states  that  the  supply 
of  power  from  large  central  stations  to  more  or  less 
isolated  industrial  establishments  situated  in  rural 
districts  at  considerable  distances  is  on  the  increase 
in  Germany. 

In  the  remarkably  prophetic  and  profoundly 
penetrating  address  that  the  late  Marquis  of  Salis- 
bury gave  in  1890,  upon  the  occasion  of  the  first 
annual  dinner  of  the  Institution  of  Electrical  Engi- 
neers, in  London,  he  stated,  in  terms  as  philosophic 
as  they  were  eloquent,  the  enormous  and  far-reach- 
ing results  that  would  probably  ensue  from  the  use  of 
electricity  as  an  agent  for  the  transmission  of  power, 
and  the  great  industrial  and  social  benefits  that  might 
be  expected  from  development  in  that  direction. 
The  Marquis  of  Salisbury  was  Prime  Minister  from 
1886  to  1892,  and  from  1895  to  1902;  but  either  he 
was  unable  or  he  deemed  it  politically  inexpedient 

*  Report  of  the  Royal  Commission  on  the  Means  of  Locomotion  and 
Transport  in  London,  1905;  p.  91. 


306    MUNICIPAL  OWNERSHIP   IN  GREAT  BRITAIN 

to  impress  upon  British  legislation  his  enlightened 
views  regarding  the  service  rendered  to  society  in 
the  past  by  private  enterprise,  and  the  advantages 
likely  to  accrue  to  society  in  the  future  from  the  ap- 
plication of  individual  initiative  to  the  exploitation 
of  the  new  force,  electricity.  The  British  voter  is 
caught  in  the  meshes  of  the  specious  argument  that 
the  profits  to  be  made  in  the  so-called  public  service 
industries  that  make  use  of  the  streets  belong  to  the 
general  public  and  not  to  mere  "private  speculators." 
He  has  been  hypnotized  by  the  words  of  Mr.  Joseph 
Chamberlain:  "I  distinctly  hold  that  all  monopolies 
which  are  sustained  in  any  way  by  the  State  ought 
to  be  in  the  hands  of  the  representatives  of  the  people ; 
by  the  representative  authority  should  they  be  ad- 
ministered, and  to  them  should  their  profits  go,  and 
not  to  private  speculators." 


CHAPTER  XVIII 

THE  MUNICIPAL  EMPLOYEES 

Before  the  Select  Committee  on  Municipal  Trad- 
ing, 1900,  Mr.  S.  Chisholm,  Lord  Provost  of  Glasgow, 
testified  as  follows:  "I  never  knew  a  (political)  con- 
test to  turn  on  the  condition  of  the  municipal  employ- 
ees. ...  I  do  not  think  there  is  any  real  danger  of 
combination  among  our  city  workmen;  indeed  I 
think  if  there  was,  the  other  workmen  would  be  quick 
to  see  that,  as  they  contribute  either  to  the  rates 
(taxes),  as  in  the  case  of  police  or  health,  or  any  of 
those  things  which  are  payable  by  the  rates,  or  as 
citizens  to  the  tramways  and  other  (municipal) 
undertakings,  their  interests  are  not  the  same  as 
those  of  the  corporation  (municipal)  employees. 
Any  special  advantage  which  the  corporation  em- 
ployees might  be  seeking  to  obtain  would  be  at  the 
expense  of  the  other  workmen;  and  it  would  be  a 
very  difficult  matter,  I  think,  for  a  dangerous  coali- 
tion, such  as  your  Lordship  refers  to,  to  be  formed."  * 

Before  the  same  Select  Committee,  Mr.  James 
Kelly,  a  Magistrate  for  Glasgow  and  a  member  of 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900; 
q.  2771  to  2783,  2866  and  2930. 

307 


308    MUNICIPAL  OWNERSHIP  IN   GREAT  BRITAIN 

the  Board  of  Management  of  the  Trader's  Defence 
Pontics  and  Association  of  Scotland,  stated  that 

Wages  as  a  mie  in  Glasgow  only  50  to  60 

per  cent  of  the  electors  went  to  the  polls,  that 
the  city  employees  exercised  considerable  influ- 
ence in  the  wards  in  which  they  lived,  and  that 
some  of  the  candidates  for  election  made  a  point 
of  bringing  before  the  voters  the  special  claims 
of  the  city  employees.  He  said  that,  if  desired,  he 
would  give  the  name  of  a  Councillor  who,  in  speaking 
to  his  constituents,  had  said  that  since  he  had  been 
sent  to  the  Town  Council  he  had  been  the  means  of 
getting  a  certain  number  of  men  employment  with 
the  city.  "Also  that  in  the  month  of  February, 
1900,  in  a  discussion  in  the  Town  Council  with  regard 
to  increase  of  wages  to  a  section  of  the  employees, 
one  member  who  voted  in  favor  of  the  increase  said 
that  he  would  make  the  constituents  of  another 
member  who  voted  against  it  aware  of  the  position 
which  he  had  taken  up."  He  then  quoted  from  an 
election  circular  issued  over  the  name  of  Mr.  John 
Ferguson,  the  recognized  leader  of  the  local  Inde- 
pendent Labor  Party.  This  circular  was  issued  on 
behalf  of  nine  members  of  the  Town  Council  in 
wards  in  which  there  were  candidates  standing  against 
other  candidates  "who  were  not  deemed  to  be  labour 
candidates."  It  concluded  with  the  words,  "Vote 
for  H.  Murphy,  the  workers'  candidate,"  and  it 
gave  the  names  of  those  who  had  voted  for  or  against 


THE   MUNICIPAL   EMPLOYEES  309 

certain  motions  made  in  the  Town  Council.  One 
of  those  motions  had  been,  "That  the  wages  of  the 
able-bodied  sweepers  and  labourers  in  the  cleansing 
department  be  increased  2  shillings  per  week  instead 
of  1  shilling,  as  recommended  in  those  minutes." 
The  circular  also  contained  the  statement,  "My 
minimum  of  21  shillings  per  week  for  the  services  of 
an  able-bodied  man  is  now,  after  long  contention, 
accepted  by  the  council."  * 

On  November  19,  1902,  Mr.  Vicary  Gibbs,  M.P., 
stated  in  a  public  address  that  within  a  week  the 
Lord  Provost  of  Glasgow,  Sir  John  Ure  Primrose, 
had  stated  that  the  city  employees  might  become 
"a  danger  which  might  be  destructive  of  the  very 
best  government  of  the  city." 

In  May,  1905,  Sir  John  Ure  Primrose  expressed 
himself  as  follows  to  the  special  correspondent 
of  The  Daily  Tribune,  of  Chicago:  "Our  ex- 
Poiitkai  Power  perience  in  municipal  ownership 
of  Employees  nas  ^gn  generally  successful,  so 
far  as  we  have  confined  ourselves  to  the  proper 
channels  of  municipal  activity.  We  have  reached 
a  point,  however,  where  we  begin  to  see  a  dan- 
ger ahead,  and  this  one  which,  from  what  I 
know  of  your  peculiar  political  system,  is  likely  to  be 
even  more  threatening  to  you  than  to  us.  This 
arises  out  of  the  building  up  of  a  great  army  of  mu- 

*  Report  from  the  Joint  Select  Committee  on  Municipal  Trading,  1900; 
q.  3447  to  3459. 


310    MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

nicipal  employees.  For  instance,  in  the  tramway 
department,  about  which  you  have  been  making 
special  inquiries,  there  are  to-day  over  4000  employees 
of  the  city.  Then  there  are  the  men  at  work  in  the 
water  department,  the  gas  supply,  and  in  the  elec- 
trical works,  in  addition  to  the  ordinary  municipal 
departments.  As  the  city  grows,  the  army  of  em- 
ployees grows,  and  there  have  been  indications  at 
times  that  they  may  wield  a  power  in  the  dictation 
of  the  city  government  which  is  not  altogether  for 
the  best  interests  of  the  municipality.  For  instance, 
not  long  since,  one  of  our  town  councillors,  in  the 
course  of  his  official  duties  and  without  any  particular 
personal  prejudice,  was  impelled  to  take  certain  action 
which  was  not  relished  by  the  members  of  the  police 
force.  There  were  not  more  than  fifty  of  the  con- 
stables, perhaps,  who  lived  in  his  ward.  Yet  you 
can  readily  see  that  each  one  of  these  was  a  recruiting 
sergeant.  The  councillor  was  not  wholly  alive  to 
the  danger,  and  he  was  actually  defeated  through  the 
efforts  of  the  paid  employees  of  the  municipality. 
What  is  true  of  the  police  department  may  be  true 
of  the  tramways  department  or  any  other  large 
branch  of  the  public  work.  Therefore,  in  the  long 
run,  even  with  us,  where  the  municipality  is  divorced 
from  politics,  we  have  begun  to  see  the  danger  which 
may  arise  from  the  existence  of  many  thousands  of 
employees,  who  are  working  for  wages  paid  to  them 
by  the  city,  and  yet  who,  to  a  certain  extent,  by  the 


THE   MUNICIPAL  EMPLOYEES  311 

right  of  franchise,  may  yet  be  able  to  dictate  the 
terms  of  their  employment,  and  even  the  rate  of 
wages.  ...  At  a  public  dinner  the  other  day  I 
made  a  suggestion  which  embodies  a  remedy  so 
radical  that  it  brought  down  on  my  head  a  great  deal 
of  criticism,  and  yet  I  am  not  certain  but  that  some 
such  step  must  be  taken  to  protect  our  municipalities 
in  the  operation  of  their  public  works.  My  sug- 
gestion was  that  it  might  be  necessary  to  withhold 
the  franchise  on  all  municipal  matters  from  city 
employees.  .  .  .  The  multiplication  of  city  employ- 
ees ...  is  certainly  one  of  the  weak  spots  in  our 
municipal  ownership  programme."  * 

In  an  earlier  chapter  has  been  recorded  the  ad- 
mission made  by  Sir  Robert  Cranston,  Lord  Provost 
of  Edinburgh,  to  the  special  correspondent  of  The 
Daily  Tribune  of  Chicago,  that  one  reason  why 
Edinburgh  did  not  operate  the  tramways  owned  by 
the  city  was:  "We  consider  ourselves  free  from 
political  influence  here  in  Scotland,  but  I  must  con- 
fess that  now  and  then  influences  are  brought  to 
bear  to  secure  employment  in  municipal  plants 
which  are  not  entirely  worthy.  .  .  .  The  private 
companies  are  better  adapted  to  run  such  systems, 
because  they  realize  that  the  result  of  the  employ- 
ment of  incompetent  men  will  be  to  reduce  their  own 
profits.  .  .  .  The  employment  of  incompetent  men 
in  responsible  positions  would  be  almost  as  bad  for 
the  public  as  if  they  were  dishonest." 

*  The  Daily  Tribune,  Chicago,  May  8,  1905. 


312    MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

Before  the  Joint  Select  Committee  on  Municipal 
Trading,  1900,  Mr.  E.  O.  Smith,  Town  Clerk  of 
Birmingham  since  1881,  said:  "Speaking  purely  of 
my  own  personal  opinion,  I  should  like  to  see  all 
corporate  employees  disfranchised."  To  the  ques- 
tion whether  he  had  found  much  pressure  for  higher 
wages  among  city  employees,  he  replied-:  "I  do  not 
think  it  has  been  at  all  severe.  This  is  a  subject  upon 
which  one  is  obliged  to  speak  with  a  great  deal  of 
delicacy.  We  had  an  all-round  application  from 
the  workmen  for  an  increase  of  wages  a  few  months 
ago.  We  thought  it  undesirable  that  one  committee 
should  give  an  increase  without  consulting  the  others. 
We  therefore  got  the  chairman  of  the  different  com- 
mittees together,  presided  over  by  the  Lord  Mayor, 
and  we  formed  a  special  committee  to  consider  it, 
and  I  think  we  did  a  wise  thing.  We  put  on  that 
committee  two  workingmen's  representatives,  as 
they  are  called,  and  the  result  was  that  we  convinced 
even  the  workingmen's  representatives  that  there 
was  no  case  made  out  for  a  general  increase,  but 
little  inequalities  were  all  corrected.  That  report 
was  published,  and  the  whole  agitation  has  died  away. 
...  I  think  when  I  came  to  Birmingham  I  heard 
some  contrasts  drawn  by  some  speakers  between 
a  salary  of  $10,000  a  year  paid  to  the  town  clerk, 
and  the  wages  of  some  scavengers,  but  I  think  that 
agitation  died  away.  The  scavenger  got  his  in- 
crease, and  the  town  clerk  still  remains  at  his  $1 0,000 


THE   MUNICIPAL  EMPLOYEES  313 

a  year.  ...  I  do  not  think  we  have  had  for  many, 
many  years  any  candidate  what  I  may  call  giving 
away  the  case  of  the  corporation  as  regards  wages. 
I  do  not  think  it  has  ever  been  done.  .  .  .  You 
may  think  it  an  evil,  but  elections  in  Birmingham 
take  place  on  (national)  political  lines;  it  is  very 
curious  it  is  so ;  why  it  should  be  so  I  do  not  know ; 
I  think  it  is  because  you  can  have  only  one  kind  of 
organization"*  (i.e.  you  cannot  have  an  organiza- 
tion for  municipal  politics  and  another  for  national 
politics). 

Before  the  same  Select  Committee  testified  Sir 
Thomas  Hughes,  who  had  been  an  alderman  since 
1878,  excepting  the  two  intervals  during  which  he 
had  been  Mayor.  He  said :  "I,  myself,  have  always 
seen  that  danger  (in  a  large  number  of  city  employees) 
and  for  that  reason  I  have  never  cared  to  encourage 
municipal  undertakings  beyond  what  was  absolutely 
necessary.  .  .  .  I  strongly  feel  myself  that  the  volun- 
tary principle  upon  which  most  (city)  officials  of  any 
position  act,  of  never  taking  any  part  in  elections,  is 
a  wise  one,  and  I  wish  it  was  followed  by  all  employ- 
ees; in  other  words,  I  should  not  regret  if  it  were 
made  part  of  the  conditions  that  a  man  taking  em- 
ployment in  a  municipality  should  not  exercise  his 
vote  for  municipal  purposes  while  so  employed.  I 
have  known  an   instance  where   combination  was 

*  Report  from  Joint  Select  Committee  on  Municipal  Trading,  1900; 
q.  1947  and  2056  to  2060. 


314    MUNICIPAL  OWNERSHIP    IN   GREAT   BRITAIN 

the  occasion  of  a  very  good  man  being  thrown  out 
of  his  position  as  a  councillor  simply  because  they 
thought  he  did  not  favor  that  particular  class  [the 
city  employees].  ...  I  should  gladly  welcome 
[disfranchisement],  but,  so  long  as  that  is  not  the 
law,  I  shall  always  feel  that  the  Corporation  ought 
not,  in  their  own  interest,  go  beyond  what  is  abso- 
lutely necessary  in  undertakings  which  might  perhaps 
be  better  done  by  others."  * 

Before  the  Select  Committee  on  Municipal  Trad- 
ing, 1900,  Mr.  J.  W.  Southern,  who  had  been  for 
twenty-two  years  an  alderman  in  Manchester, 
stated  that  he  shared  the  feeling  of  Sir  Thomas 
Hughes.  "There  seems  a  disposition  more  and  more 
for  employees  to  coalesce,  and  although  there  may 
not  be  any  absolute  abuse  in  that  direction  to-day, 
yet  there  is  I  think  a  little  cause  for  anxiety  if  these 
employees  should  band  themselves  together  and  vote 
for  a  candidate  without  regard  to  his  fitness  or  to  any 
other  question  but  whether  he  will  vote  for  an  in- 
crease of  their  wages.  If  that  came  about  it  would 
be  a  very  awkward  thing,  and  it  might  lead  to  dis- 
franchisement for  municipal  purposes  of  those  who 
would  otherwise  elect  their  masters."  In  reply  to 
the  query  whether  he  had  known  of  a  case  of  illegiti- 
mate pressure  being  put  upon  a  candidate,  the  wit- 
ness  replied:     "No,    I   cannot   say   I   have.     Still 

*  Report  from  Joint  Select  Committee  on  Municipal  Trading,  1900' 
q.  2304. 


THE   MUNICIPAL  EMPLOYEES  315 

there  is  a  distinct  party  now,  the  Independent  Labour 
Party,  which  does  not  care  for  any  other  interests 
than  those  of  labour,  and  they  are  becoming  a  power- 
ful body.  I  hope  the  wiser  men  among  them  would 
rather  avoid  the  abuse  that  this  would  be,  because 
if  it  developed,  it  would  require  the  intervention  of 
Parliament."  * 

Before  the  Select  Committee  on  Telephones,  1895, 
Mr.  H.  E.  Clare,  Deputy  Town  Clerk  of  Liverpool, 
testified:  "I  deem  it  an  axiom  that  any  business 
Costliness  of  involving  the  employment  of  manual 
Municipal  labour  will  be  done  more  cheaply  by  a 

Operations  company  than  by  a  corporation  sub- 

ject to  November  elections.  .  .  .  My  experience  of 
local  government  leads  me  to  this  conclusion:  that 
if  a  thing  can  be  done  by  a  corporation  for  a  fixed 
sum  of  money,  it  can  be  done  by  a  contractor  for  a 
less  sum,  because  there  is  always  a  certain  amount  of 
expense  in  connection  with  a  public  body  which  a 
contractor  manages  to  save,  and  to  make  a  profit 
where  a  corporation  would  only  pay  its  way.  .  .  . 
I  do  not  approve  at  all  of  the  corporations'  work- 
ing tramways;  I  believe  in  their  owning  them,  but 
not  working  them."  f 

In  February,  1904,  two  weeks  before  the  date  set 
for  the  London  County  Council  elections,  the  Council 

*  Report  from  Joint  Select  Committee  on  Municipal  Trading,  1900; 
q.  2475  to  2477. 

t  Evidence  taken  from  the  Select  Committee  on  the  question  of  ade- 
quacy of  the  Telephone  Service  in  Local  Areas,  1895;  4351,  1268,  and 
1476. 


316     MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

issued  as  a  public  document  a  return  which  re- 
corded the  increases  in  the  wages  of  the  London 
County  Council  employees  in  the  period  from  1899 
to  1904.  The  Council  at  that  time  itself  carried 
out  many  public  works  instead  of  letting  con- 
tracts to  contractors  and  builders.  Therefore  the 
list  contained  a  large  number  of  instances  of  increase 
of  wages  to  men  in  the  building  and  engineering 
trades.  The  list  showed  increases  in  the  aforesaid 
trades  rising  to  16,  33,  and  38  per  cent.  Upon  these 
increases  Engineering*  a  journal  of  the  highest 
standing,  commented  to  the  effect  that  the  Board  of 
Trade  returns  showed  that  since  1899  the  general 
rate  of  wages  in  the  engineering  and  building  trades 
had  not  increased  one  per  cent.  It  added  that  the 
London  County  Council  employed  upward  of  12,000 
workers,  that  only  260,000  persons  took  the  trouble 
to  vote  f  at  London  County  Council  elections,  and 
that  many  candidates  were  elected  by  a  majority  of 
less  than  five  per  cent. 
In  reply  to  this  article  The  Municipal  Journal  J 


*  February  26,  1904. 

t  The  Municipal  Journal,  April  29,  1904. 


Number  of  Persons  entitled 
to  Vote  at  London  County 
Council  Elections 


Proportion 
who  VOTED 


1904 

1 901 


699.363 
? 


/o 
45-7 
40.8 


X  March  4,  1904. 


THE   MUNICIPAL  EMPLOYEES  317 

wrote:  "Engineering  is  concerned  lest  the  12,000 
employees  of  the  London  County  Council  will  influ- 
ence to-morrow's  election,  and  the  journal  gives  a 
pathetic  list  of  those  trades  in  regard  to  which  the 
authority  has  increased  wages  and  improved  the 
conditions  of  labour.  What  would  Engineering? 
Would  it  sweat  municipal  workmen  so  that  they 
would  vote  against  a  particular  party?  ...  As 
there  are  no  candidates  opposing  the  Council's  labour 
policy,  what  does  it  matter  whom  these  12,000  work- 
men vote  for?  .  .  .  Why  does  this  well-meaning 
journal  persist  in  raging  against  the  inevitable?" 

In  December,  1902,  the  London  County  Council 
was  preparing  to  construct  vaults  at  Knightsbridge 
in  connection  with  a  widening  of  the  streets.  The 
Council's  Department  of  Works  estimated  that  the 
brickwork  would  cost  the  Council  $140  per  rod. 
Mr.  M.  R.  Clutton,  the  agent  for  very  large  land 
and  house  owners  in  London,  by  way  of  comment 
upon  the  Works  Department's  estimate,  said  that  the 
British  Office  of  Works'  "jobbing  contract  for  the 
same  description  of  work,  whether  in  a  basement 
or  on  the  top  of  a  high  building,  is  $95.50  per  rod. 
This,  in  my  opinion,  would  make  $90  per  rod  a  very 
fair  price  for  vaults. "  Lord  Avebury  added  that  the 
Chairman  of  the  London  County  Council  recently 
had  stated  that  a  County  Council  bricklayer  would 
lay,  on  an  average,  only  300  bricks  a  day* 

*  Lord  Avebury:  Essays  and  Addresses,  1903. 


818       MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

The  foregoing  episodes  recall  to  mind  the  fact 
that  the  late  Lord  Farrer  was  returned  to  the  Lon- 
don County  Council  after  he  had  retired  from  the 
Board  of  Trade,  and  that,  "in  a  moment  of  eco- 
nomic remorse,  he  once  challenged  the  Council  to 
let  a  part  of  a  proposed  public  work  be  carried  out 
by  a  contractor,  while  the  Council,  for  purposes 
of  comparison  of  results,  carry  out  the  remainder 
of  the  work."  * 

When  the  late  Mr.  Bagehot  was  writing  his 
book  upon  the  British  Constitution,  and  had  reached 
the  chapter  which  was  to  treat  of  the  Queen,  he 
remarked  that  he  was  embarrassed  by  lack  of 
material,  for  thus  far  there  had  been  appointed  no 
Royal  Commission  or  Parliamentary  Select  Com- 
mittee "to  sit  on  the  Queen."  Any  one  writing 
to-day  upon  the  municipalities  and  their  employees 
is  similarly  embarrassed  by  lack  of  material.  It 
is  true  that  in  1900  and  again  in  1903  a  Select  Com- 
mittee was  appointed  to  report  on  Municipal  Trad- 
ing, but  those  committees  did  not  inquire  at  all 
exhaustively  into  the  question  of  the  municipal 
employees.  In  fact,  they  did  not  touch  the  fringe 
of  the  question. 

On  the  other  hand,  there  is  available  a  vast 
amount  of  official  information  on  the  employees 
of  the  British  Post  Office  and  the  British  State 
Telegraphs.     The  study  of  that  material  has  re- 

*  D.  H.  Davies:  The  Cost  of  Municipal  Trading,  p.  60. 


THE  MUNICIPAL  EMPLOYEES  319 

vealed  to  the  author  a  condition  of  affairs  so  abso- 
lutely at  variance  with  the  accounts  of  the  work- 
House  of  Com-  ing  of  the  British  civil  service  given 
mons  under  Civil  even  by  the  better  class  of  writers, 

Service  Control       ^  he  ig  entirely  unable  to  accept  the 

statements  to  be  found  in  the  unofficial  and  cur- 
rent literature  of  the  day  to  the  effect  that  the 
administration  of  the  British  municipalities  is  busi- 
nesslike. To  the  author  the  question  is  an  open 
one,  which  must  remain  so  until  authoritative  — 
that  is,  official  —  evidence  is  submitted.  Com- 
parison, over  a  wide  range  of  countries,  of  the 
evidence  revealed  in  official  documents  with  the 
reports  spread  broadcast  by  "birds  of  passage," 
who  study  problems  "on  the  spot"  without  any 
perspective  or  background,  has  led  the  author  to 
lay  little  value  upon  such  reports.  Suffice  it  to 
say,  therefore,  that  at  present  there  is  no  docu- 
mentary evidence  on  the  question  of  the  municipal 
employees  of  the  United  Kingdom;  but  that  such 
fragments  of  documentary  evidence  as  have  become 
available  seem  to  indicate  a  tendency  of  the  mu- 
nicipal civil  service  to  develop  along  the  lines  of  the 
national  civil  service  of  the  United  Kingdom. 

In  conclusion,  it  may  be  stated  that  the  national 
civil  service  of  Great  Britain  has  the  British  House 
of  Commons  completely  under  its  thumb,  and 
compels  that  body  to  prevent  the  British  Govern- 
ment from  administering  its  great  trading  depart- 


320       MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

ments,  the  Post  Office  and  the  Telegraphs,  in  a 
businesslike  fashion.  The  work  of  the  trading 
departments  is  done  efficiently,  if  one  look  only  to 
the  service  rendered  to  the  public;  it  is  done  wo- 
fully  inefficiently,  if  one  look  at  all  at  the  cost  of 
getting  it  done.  The  British  Government  has 
lost  control  over  wages  and  salaries;  it  cannot 
dismiss  men  made  superfluous  by  the  invention 
of  labor-saving  devices  or  methods;  it  does  not 
pretend  to  dismiss  men  for  incompetency;  it  has 
very  little  power  to  dismiss  men  who  are  not  ame- 
nable to  discipline ;  it  cannot  promote  men  accord- 
ing to  merit,  but  must  promote  all  but  exclusively 
by  seniority.  Members  of  the  House  of  Commons 
intercede,  not  only  behind  the  scenes,  but  openly 
and  from  the  floor  of  the  House  of  Commons,  at 
one  end  of  the  scale  on  behalf  of  men  dismissed  on 
account  of  theft,  and  at  the  other  end  in  behalf 
of  girls  in  the  central  telephone  exchanges  who 
have  been  passed  over  when  it  has  been  necessary 
to  promote  some  one.  Mr.  Austen  Chamberlain, 
when  he  held  the  office  of  Postmaster  General, 
stated  in  the  Commons  that  one- third  of  the  time 
of  himself  and  his  leading  men  in  the  Post  Office 
and  Telegraphs  was  given  to  the  consideration 
of  petty  questions  of  discipline,  which  in  a  private 
business  would  never  reach  the  men  holding  posi- 
tions requiring  great  executive  capacity.  Finally, 
a  leading  executive  officer  has  stated  before  a  Par- 


THE   MUNICIPAL  EMPLOYEES  321 

liamentary  Select  Committee  that  the  men  whose 
duty  it  is  to  determine  the  scales  of  payment  and 
to  maintain  discipline  make  it  their  practice,  on 
reaching  their  offices  in  the  morning,  to  turn  first 
of  all  to  the  report  of  the  proceedings  in  the  House 
of  Commons  on  the  day  before,  to  ascertain  the 
"temper  of  the  House,"  and  that  they  govern 
themselves  accordingly  in  the  administration  of 
the  great  business  enterprises  over  which  they  are 
supposed  to  preside.  "The  House  of  Commons 
are  our  masters"  were  the  words  with  which  one 
of  the  highest  officers,  if  not  the  highest  one,  in  the 
State's  service,  pleaded  the  interference  of  mem- 
bers of  the  House  of  Commons  as  an  excuse  for 
not  getting  rid  of  unworthy  public  servants.  He 
added,  "It  is  not  a  good  reason,  but  as  a  matter 
of  fact  it  is  powerful." 


CHAPTER   XIX 

CONCLUSION 

The  doctrine  that  the  public  service  industries 
which  use  the  public  streets  differ  essentially  from 
ordinary  trading  and  manufacturing  ventures,  and 
Governments  tnat:  they  should  be  subjected  to 
Rarely  can  Re-      special  limitations  and  special  taxa- 

verse  their  Steps     tkm   designed    to    secure    to    the    pub. 

lie  at  large  a  share  in  their  profits,  has  permanently 
paralyzed  every  public  service  industry  to  which 
it  has  been  applied.  A  number  of  the  leading 
statesmen  of  Great  Britain  have  come  fully  to 
realize  that  fact,  but  they  have  learned  at  the  same 
time  that  it  is  extremely  difficult  for  governments 
to  reverse  their  steps.  Politics  is  the  great  art 
of  compromise.  Politicians  as  a  class  are  as  pa- 
triotic and  as  disinterested  as  any  other  class  of 
the  community;  but  they  are  sadly  handicapped 
by  the  conditions  under  which  they  must  carry 
on  their  great  and  public-spirited  labors.  They 
set  about  their  work  by  asking  themselves  what 
is  the  ideal  thing  to  do.  After  that  comparatively 
simple  question  has  been  answered  comes  the  real 
problem:    How    far  will    the    conflict   of   sectional 

322 


CONCLUSION  323 

interests  and  class  interests,  class  hatred,  popu- 
lar prejudices  and  popular  misconceptions  per- 
mit the  attainment  of  that  ideal?  And  how 
far  does  it  compel  the  modification,  or  even  the 
practical  sacrifice,  of  the  ideal?  Therein  lies  the 
explanation  of  the  fact  that  no  serious  effort  has 
been  made  to  abandon,  or  even  to  modify,  the  policy 
entered  upon  in  1870  —  namely,  to  seek  to  secure 
to  the  general  public  a  share  in  the  profits  to  be 
made  in  the  industries  that  use  the  public  streets. 
It  was  a  very  easy  matter  to  announce  that  doc- 
trine and  to  cause  it  to  spread  over  the  whole  land ; 
but  when  it  was  found  that  the  doctrine  worked 
disastrously  in  a  workaday  world,  it  turned  out 
to  be  impossible  to  arrest  and  to  overthrow  it. 
After  the  British  cities  had  paralyzed  individual 
initiative  and  private  adventure,  they  declined 
themselves  to  step  in  and  fill  the  void  created. 
Progress  Depend-  Therefore  the  task  of  establishing 
ent  upon  successively  the  horse  street  railway 

Freedom  in  the      industry,  the  electric  lighting  indus- 

United  States  .  .,1,11  •     1      ^  i    Ai 

try,  the  telephone  mdustry,  and  the 
electric  street  railway  industry  was  left  to  the  United 
States,  the  only  country  which  in  the  pregnant 
period  from  1870  to  1900  granted  to  public  service 
companies  charters  that  were  sufficiently  liberal 
to  induce  such  companies  to  assume  the  great  risks 
and  losses  which  are  an  unavoidable  incident  to 
the    establishment    and    the    subsequent    develop- 


324     MUNICIPAL  OWNERSHIP   IN   GREAT   BRITAIN 

ment  of  new  industries.  Had  the  United  States 
pursued  the  policy  of  the  rest  of  the  world,  the 
electric  light,  the  telephone,  and  the  electric  street 
railway  to-day  would  be,  not  accomplished  facts, 
but  tentative  experiments.  The  English  and  the 
German  municipalities  contributed  nothing  to  the 
development  of  those  industries,  but  purchased 
them  " ready-made"  of  the  United  States. 

The  British  cities  thus  far  have  shown  themselves 
incapable  of  utilizing  fully  the  industries  given 
them  ready-made  by  the  American  captain  of 
industry.  Nowhere  in  Great  Britain  has  the  elec- 
tric street  railway  been  used  for  the  purpose  of 
decentralizing  or  "suburbanizing"  the  population 
of  the  large  cities.  In  this  matter  the  British  cities 
have  shown  an  indifference  to  and  a  disregard  of 
the  public  health,  physical  as  well  as  moral,  that 
for  brutality  have  no  parallel  in  the  records  of 
private  industry.  Scarcely  less  brutal  is  the  dis- 
regard by  the  British  cities  of  the  welfare  of  the 
more  than  one  hundred  thousand  people  who 
might  find  employment  in  the  electrical  industries, 
would  the  cities  but  remove  from  those  industries 
their  paralyzing  hand.  In  this  persistent  and 
brutal  disregard  of  the  public  welfare  we  should 
find  a  lesson  calculated  to  make  us  refuse  to  ac- 
cept without  question  the  statement  —  which  we  are 
constantly  asked  to  accept  as  an  axiom  —  that  the 
State  necessarily  and  always  is  a  beneficent  body. 


CONCLUSION  325 

The  experience  of  Great  Britain  also  reveals 
the  untenableness  of  the  argument  that,  granting 
that  public  bodies  cannot  build  up  new  industries 
Governmental  or  contribute  to  the  further  develop- 
Obstruction  to  ment  of  established  ones,  they  yet 
Progress  may  ^  trusted  w}th  the  conduct  of 

industries  that  have  reached  the  stationary  stage. 
In  the  first  place,  there  is  no  industry  of  which  one 
can  say  with  finality  that  it  has  reached  the  station- 
ary stage.  In  the  second  place,  every  industry,  no 
matter  what  its  stage  of  development  may  be,  is 
liable  to  be  displaced  wholly  or  in  part  by  some  new 
industry.  That  is  one  of  the  ordinary  risks  of  trade. 
,  But  the  British  cities,  as  well  as  the  British  nation, 
absolutely  refuse  to  accept  that  risk.  The  British 
cities  refused  to  expose  their  gas  plants  to  compe- 
tition from  the  electric  light ;  subsequently  they  re- 
fused to  expose  their  local  electric  lighting  plant  to 
competition,  even  in  the  supply  of  current  for  power, 
from  the  more  modern  electricity-in-bulk  generating 
stations.  The  British  Government,  on  the  other 
hand,  has  persistently  refused  to  allow  the  tele- 
phone to  compete  freely  with  the  telegraph.  The 
argument  that  a  business  in  which  had  been  in- 
vested "the  people's  money"  must  not  be  impaired 
by  competition  from  a  " dividend-seeking"  com- 
pany has  thus  far  always  swept  everything  before 
it,  completely  blinding  the  people  to  their  own 
interests. 


826     MUNICIPAL   OWNERSHIP   IN   GREAT   BRITAIN 

The  upshot  of  thirty-five  years  of  action  upon  the 
doctrine  that  the  public  service  industries  that  make 
use  of  the  public  streets  differ  from  ordinary  trad- 
ing and  manufacturing  ventures,  and  must  be 
made  to  share  their  profits  with  the  public  at  large, 
is  that  the  people  of  the  United  Kingdom  have  at 
their  disposal  about  one-quarter  the  street  rail- 
way facilities,  one-third  the  electric  lighting  facili- 
ties, and  less  than  one-quarter  the  telephone  facili- 
ties, that  they  would  have  to  have  before  they 
could  be  said  to  be  as  well  supplied  with  these 
facilities  as  are  the  people  of  the  United  States. 
Furthermore,  fully  120,000  persons  who  might  be 
making  a  living  in  the  United  Kingdom  in  the 
electrical  industries  have  been  obliged  either  to 
emigrate  from  the  United  Kingdom  or  to  join  the 
ranks  of  the  unemployed.  Finally,  there  is  rea- 
son to  fear  that  the  Tramways  Act,  1870,  and  the 
Electric  Lighting  Acts,  1882  and  1888,  have  caused 
England,  to  repeat  the  words  of  one  of  England's 
most  brilliant  mechanical  engineers,  the  late  Sir 
Frederic  J.  Bramwell,*  "to  lose  forever  her 
proper  position  in  the  manufacture  and  supply  of 
electrical   machinery." 

The  reader  will  remember  that  the  late  Lord 
Farrer,  as  Permanent  Secretary  of  the  Board  of 
Trade  from  1867  to  1886,  invariably  threw  the 
great  weight  of   his  official  position   and  his  per- 

*  Journal  of  the  Society  of  Arts,  January  30,  1903. 


CONCLUSION  327 

sonality  on  the  side  of  municipal  activity  and  against 
individual  initiative  and  private  enterprise;  and 
that  "his  judgment  and  experience,  in  his  own 
time,  largely  guided  the  government  "*  in  all  mat- 
ters coming  within  the  domain  of  the  Board  of 
Trade.  Lord  Fairer  was  prompted  to  take  that 
course  in  part  because  he  feared  that  "there  was 
a  serious  political  evil  to  be  apprehended  from  the 
growing  influence  of  the  great  joint-stock  company 
interest  in  Parliament  and  in  local  governing  boards. 
This  evil  is,  if  report  speaks  true,  a  very  serious 
one  in  America.  In  this  country  it  is  as  yet  not 
much  felt,  except  in  the  combined  resistance  which 
the  companies  make  to  any  alteration  of  the  law 
which  affects  themselves.  But  the  success  and 
ability  with  which  they  can  do  this  is,  considering 
the  ever  widening  sphere  of  their  operations,  a 
great  evil  in  itself,  and  if  they  should  ever  turn 
their  powerful  organization  to  a  political  purpose, 
it  would  become  a  national  calamity."  f 

This  quotation  shows  that  Lord  Fairer  had  ap- 
prehended the  truth  which  the  late  Lord  Acton, 
in  his  day  perhaps  the  most  learned  man  of  Eng- 
land, had  said  was  the  most  fundamental  truth 
taught  by  the  study  of  history  —  that  great  power, 
wherever  lodged,  is  dangerous.  But  the  applica- 
tion which  Lord  Fairer  made  of  the  great  truth 

*  Sir  Robert  Giffen,  in  the  supplementary  chapter  which  he  wrote  for 
The  State  in  its  Relation  to  Trade,  by  T.  H.  Farrer. 

t  T.  H.  Farrer:  The  State  in  its  Relation  to  Trade,  p.  123. 


828    MUNICIPAL  OWNERSHIP   IN  GREAT   BRITAIN 

which  he  had  apprehended  —  namely,  the  trans- 
fer of  political  power  from  the  joint-stock  com- 
panies to  the  local  governing  bodies  —  shows  that 
Lord  Farrer  belonged  to  that  numerous  class  of 
persons  who  forever  are  treating  symptoms  and 
not  the  disease.  Great  power,  wherever  lodged, 
is  dangerous;  but  the  way  to  meet  that  danger  is 
not  forever  to  be  changing  the  person  or  the  place 
where  power  is  lodged.  The  way  to  meet  it  is  to 
train  the  citizens  of  the  country  to  such  a  pitch  of 
civic  virtue  and  political  intelligence  that  power 
cannot  be  abused,  no  matter  where  lodged.  To 
pursue  any  other  course  is  merely  to  jump  from 
the  frying-pan  into  the  fire.  Lord  Farrer  himself 
lived  long  enough  to  have  overwhelming  proof  of 
the  fact  put  before  him,  as  is  shown  by  the  sub- 
joined quotation  from  Lord  Alverstone,  the  present 
Lord  Chief  Justice  of  England,  who  spoke  from 
experience  gained  as  a  Member  of  the  House  of 
Commons  in  the  years  1885  to  1900.  Said  the 
Lord  Chief  Justice:  "He  wished  to  allude  to  one 
part  of  the  subject  which  had  only  been  touched 
upon  by  the  author,  but  which  he  [Lord  Alverstone] 
as  a  member  of  the  House  of  Commons  for  a  great 
many  years  had  frequently  had  pointedly  brought 
before  his  notice.  The  author  had  referred  to 
the  Municipal  Corporations  Association.  Only 
those  who  had  been  in  the  House  of  Commons 
knew  the  really  almost  unfair  weight  and  power 


CONCLUSION  329 

which  municipal  bodies  had  in  the  House,  because, 
not  only  did  the  local  member  not  dare  to  resist 
the  wishes  of  his  local  friends,  but  all  the  munici- 
pal corporations  acted  together,  and  when  there 
had  been  an  attempt  to  get  statutory  powers  for 
private  enterprise  which  was  thought  to  conflict 
with  the  possibility  of  municipal  trading  in  a  par- 
ticular place,  not  only  was  the  influence  of  the 
municipality  in  that  particular  place  set  to  work, 
but  the  influence,  through  the  Municipal  Corpora- 
tions Association,  of  many  other  municipal  bodies 
which  had  nothing  whatever  to  do  with  the  par- 
ticular scheme.  Without  fear  of  contradiction  he 
could  say  that  the  question  under  those  circum- 
stances was  not  fairly  determined  upon  its  merits, 
and  was  not  fairly  discussed.  Being  no  longer 
in  politics  he  had  no  right  to  express  any  opinion 
upon  the  merits  of  the  case,  beyond  saying  that  it 
was  a  question  of  such  vast  importance  that  it 
ought  to  be  thoroughly  understood  and  tested 
upon  its  merits  and  not  dealt  with  by  any  consid- 
erations of  popularity,  public  sentiment,  or  anything 
of  that  kind."* 

Industrial  progress  comes  not  from  the  people 
at  large,  whether  acting  as  individuals  or  in  the 
corporate  capacity  of  state  or  city.  It  comes 
solely  from  a  comparatively  small  body  of  men  of 
unusual  imagination,  daring,  power  of  persuasion, 

*  Journal  of  the  Society  of  Arts,  January,  1903. 


330      MUNICIPAL  OWNERSHIP  IN  GREAT  BRITAIN 

and  executive  ability.    Those  men  see,  or  believe 
they  see,  possibilities  of  development  and  new  ways 

Industrial  Devel-    of    doinS   thingS'    where    the   average 

opment  due  to        man  sees  naught  but  the   possibility 
individual initia-  0f  faiiure.     They  have  the   courage 

of  their  convictions,  as  well  as  the 
power  to  infuse  that  courage  into  others  —  the 
possessors  of  the  capital  without  which  no  new 
idea  and  no  invention  can  be  tested  and  developed. 
Finally,  the  men  in  question  have  executive  ability, 
which  is  the  power  to  plan,  and  the  ability  to  select 
the  men  who  can  be  trusted  with  the  execution  of 
their  plans. 

The  United  States  differs  from  Europe  not  so 
much  in  the  possession  of  men  of  this  unusual 
type,  as  in  the  fuller  use  that  it  makes  of  such  men 
of  this  type  as  it  possesses.  For  this  difference 
between  the  United  States  and  Europe  there  are 
two  reasons.  One  of  them  is  the  extraordinary 
stimulus  afforded  by  our  democratic  institutions 
and  a  virgin  country,  rich  in  resources  of  all  kinds 
and  calling  men  of  courage  and  imagination  to 
the  utmost  pitch  of  activity.  The  other  reason, 
and  the  more  important  one,  is  that  we  have  more 
of  "that  liberty  which  is  the  nurse  of  all  great  wits" 
as  well  as  of  all  spirit  of  adventure.  "What  is 
it  that  has  made  Americans  what  they  are  but 
their  passion  for  individual  freedom,  their  habit 
of  acting  on   their  own  judgment  and   their  own 


CONCLUSION  331 

initiative,  and  their  dislike,  I  may  say  their  scorn, 
for  the  leading-strings  of  official  authority?  With- 
out that  freedom  of  individual  action  the  United 
States  can  never  continue  to  be  in  the  future  what 
it  has  been  in  the  past."  Every  extension  of  the 
functions  of  the  State  and  the  City  will  impair 
that  freedom  of  individual  action,  and  therefore 
it  is  to  be  resisted  to  the  utmost.  Only  as  a  matter 
of  last  resort,  of  the  last  means  of  escape  from  ills 
that  can  no  longer  be  borne,  should  we  have  recourse 
to  extending  the  functions  of  the  state  or  the  city. 

In  the  meantime,  comparison  of  our  experience 
under  the  policy  of  the  minimum  of  governmental 
intervention  —  the  priceless  heritage  bequeathed  to 
us  by  our  forefathers  —  with  the  experience  of 
Great  Britain  under  the  policy  of  the  maximum 
of  intervention,  shows  us  that  we  have  no  ills  that 
call  for  the  heroic  remedy  of  treating  the  public 
service  industries  as  industries  differing  in  any 
way  from  ordinary  trading  and  manufacturing 
ventures.  We  have  more  street  railway  facilities, 
electric  lighting  facilities,  and  telephonic  facilities 
than  have  our  British  cousins;  and  we  make  more 
use  of  our  ample  facilities  than  our  British  cousins 
make  of  their  restricted  facilities.  This  shows 
that  the  prices  charged  to  us  by  our  companies  under 
the  stimulus  of  an  enlightened  self-interest  are 
better  adapted  to  our  purses,  than  are  the  prices 
charged  to  our  British  cousins  by  their  city  fathers. 


INDEX 


Aberdeen  and  Dundee,  conditions 
demanded  for  assent  of,  to  a 
Provisional  Order,  24 

Administrative  County  of  London 
Electric  Power  Bill  talked  to  death 
in  the  Commons,  291-4;  pro- 
visions of,  292-3 ;  had  a  strong 
support,  293;    opposition,  294 

Air,  compressed,  and  hydraulic 
power,  under  consideration  at 
Leeds,  215-6 

Alverstone,  Lord,  on  power  of  the 
Municipal  Corporations  Associa- 
tion, 328-9 

American  practice  toward  public 
service  companies,  1 

Arc  light,  discovered  by  Sir  Humphry 
Davy,  4 

Armstrong,  Sir  W.,  established  earliest 
private     electric-light     installation, 

4-5 
Asphalt     pavements     to     supersede 
street  railways,  147 

Balfour,  Gerald,  replies  to  committee 
on  improving  electrical  legislation, 
82-5 

Bazalgette,  J.  W.,  thought  asphalt 
would  remove  necessity  for  tram- 
ways, 147 

Bellamy,  C.  R.,  on  tramway  fares  in 
Liverpool,  112-3 

Bill  for  street  railway  over  West- 
minster Bridge,  arguments  against, 

Birkenhead,  street  railway  built  in, 
by  George  Francis  Train,  8 

Birmingham,  arguments  of  Joseph 
Chamberlain  for  purchase  of  gas 
plant  of,  16-17;  street  railways  in, 
13 1-5;  building  of,  discouraged, 
132-3;  lack  of  transit  facihties 
and  overcrowding  in,  134-5 

Birmingham  Committee,  report  of, 
on  city's  incompetence  to  take 
hold  of  a  new  industry,  221-8; 
electric  light  company  in  Birming- 


ham, 229-31;  plant  transferred  to 
the  city,  231-2 

Blackmail  in  demands  of  local 
authorities  from  promoters,  49 

Board  of  Trade  to  give  certificates 
for  laying  down  tramways,  14; 
authorized  to  grant,  with  consent 
of  local  authorities,  Provisional 
Orders,  22;  should  be  constituted 
friends  of  the  public,  32;  obliged 
to  warn  local  authorities,  35-6; 
unable  to  provide  scheme  of  tram- 
ways for  London,  143;  scandalous 
manner  in  which  Act  of  1888  on 
electric  lighting  was  administered 
by  the,  242;  influence  of  local 
authorities  with,  244-6,  252-3; 
difficulty  of  obtaining  electric  light- 
ing charters  from,  247-51;  refusal 
of,  to  overrule  provisional  veto,  253; 
discrimination  of,  against  com- 
panies, 253-9;  notice  of,  to  appli- 
cants for  charters,  266;  sides  with 
municipalities,  288-9 

Boston,  street  railway  fares  in,  108-9 

Boston  Elevated  Railway  Co.,  earn- 
ings of,  taxed,  101-2 

Boyle,  Sir  Courtenay,  on  purchase  of 
remunerative  gas  plants,  182;  on 
overruling  provisional  veto,  245-6 

Bradford,  ruling  of  Light  Railways 
Commissioners  on  tramways  near, 
74-6 

Bramwell,  Sir  F.  J.,  on  compelling 
power  of  municipalities,  175-6;  on 
electric  lighting,  209-10 

Bristol,  street  railways  in,  owned  by 
a  company,  140 

Bristol  Gas  Co.  denied  enlarged 
powers,  177 

Broadhurst,  Mr.,  against  the  Lan- 
cashire Power  Bill,  281-2 

Bureaucrat  versus  men  of  affairs,  51-7 

Bureaucratic  mind,  a  study  of  the, 
202-3 

Burns,  John,  on  unreasonable  vetoes 
by  Councils,  154-5 


333 


334 


INDEX 


Cable  street  railway,  first,  in  United 
States  opened,  57;    in  Edinburgh, 

"5 

Cable  system  not  used  on  British 
tramways,  57;  authorized  by  a 
Provisional  Order,  57;  reason  for 
failure,  58 

Cable  traction,  excessive  cost  of 
equipment  for,  in  Edinburgh, 
127-30 

Calcraft,  Sir  H.  G.,  argued  for  com- 
pulsory sale  at  structural  value, 
a  1 8-0,  229;  on  confidence  of  Board 
of  Trade  in  decisions  of  local 
authorities,  244-5 

Capital,  American,  supporting  street 
railway  schemes  in  England,  21-2 

Capital,  and  electric  lighting,  185, 
187;  tenacity  of  British  capitalists, 
197;  attitude  of,  towards  new 
industries,  207-8,  214-5;  deterred 
by  compulsory  sale  clause,  210-1; 
thirty  years'  franchise  not  enough 
for,  220 

Capitalists  of  Great  Britain,  record 
of,  for  venturesome  investments, 
3 ;  afraid  of  street  railway  ventures, 
ai,  133;  ready  to  experiment,  61-2; 
eager  to  put  electric  light  in  compe- 
tition with  gas,  265 

Carrington,  Lord,  against  tramways 
over  Westminster  Bridge,  153 

Chamberlain,  Joseph,  in  favor  of 
municipal  ownership  of  industries 
using  streets,  16;  a  champion  of 
municipal  trading,  62,  130,  173; 
on  municipalization  of  gas  works, 
131;  introduced  Electric  Lighting 
Bdl,  1 86;  speech  of,  on  same,  188- 
90,  194-c;   retired  from  office,  200 

Chaplin,  Mr.,  on  Standing  Order  No. 
22,  47-9;  withdrew  his  amend- 
ment, 51 

Chisholm,  Samuel,  on  electric  supply 
in  Glasgow,  239-40;  on  municipal 
employees,  307 

Cities  confess  their  incompetence  to 
take  hold  of  a  new  industry, 
221-40;  report  of  Birmingham 
Committee,  221-8;  difficulties  in 
the  way  of  electric  lighting,  223-4, 
227-8;  no  analogy  with  under- 
taking the  supply  of  gas,  225-6; 
gas  the  most  effective  illuminant, 
228;  value  of  experiment  and  ex- 
perience, 228-9;  failure  in  Liver- 
pool and  four  other  cities  to  install 
electric   fighting  plants,   232-3;    a 


company  in  Liverpool,  bought  by 

the  city,  233-4 
Civil  Service  control  of  the  House  of 

Commons,  319-21 
Cohen,  Lionel,  on  prohibitive  effect 

of  Act  of  1882,  210-11 
Commons,     House    of,     under    civil 

service  control,  319-21 
Community,  welfare  of,  promoted  by 

the     individual     or    company,     2; 

more  benefit  to,  by  reducing  fares 

than   by   reducing   taxes,    14;     no 

desire  for  promotion  of,  171 
Consumer,  municipalities  versus  the, 

240-65 
Continent,    street    railways   in   cities 

on  the,  10 
Cranston,  Sir  Robert,  on  municipal 

management,   128-30;    on  political 

power  of  municipal  employees,  311 

Davenport,  Mr.  Bromley,  on  the 
General    Power    Distribution    Bill, 

273~4 

Davy,  Sir  Humphry,  arc  light  dis- 
covered by,  4 

Donelly  and  District  Tramway  Co., 
compulsory  purchase  of,  ordered 
under  Light  Railways  Act,  80 

Dublin,  tramway  service  in,  96-7 

Edinburgh,  question  of  housing  the 
poor  in,  55;  tramways  to  decen- 
tralize the  population,  56;  ruling 
of  Light  Railway  Commissioners 
on  a  tramway  in,  74;  street  rail- 
ways in,  117-30;  tramways  under 
private  management  favor  working 
classes,  118;  development  re- 
tarded by  opposition  of  city,  1 19-23 ; 
experiments  with  steam,  1 23 ;  plant 
sold  to  city,  124;  city  converts 
horse  car  system  to  cable,  125-7; 
unbusinesslike  management  by  mu- 
nicipality, 127;  "soaked"  the 
operating  company,  128;  obtained 
electric  light  charter  and  delayed 
supplying  current,  238;  owns  gas 
plant,  238 

Electric  current,  different  prices 
charged  for,  by  city  of  Bristol,  177 

Electric  lamp,  earliest  incandescent, 
made  by  Swan,  4 

Electric  light  companies,  so-called 
"marauding,"  196-7;  town  clerks 
and  councillors  on  the,  212-8 

Electric  lighting,  incompetence  of 
cities  to  take  hold  of,  confessed  by 


INDEX 


335 


Birmingham  Committee,  221-8; 
alleged  difficulties,  223-4,  227-8; 
value  of  experiment  and  experience, 
228-9;  failure  of  Liverpool  and 
four  other  cities  to  install  plants  for, 
232-3;  a  company  in  Liverpool, 
bought  by  the  city,  233-4;  Man- 
chester gets  charter  to  keep  out 
companies,  234;  profits  applied  to 
reduce  taxes,  235;  Sheffield  admits 
a  company  and  buys  it  out,  235-6; 
Leeds  admits  a  company  on  its 
agreement  to  sell,  and  pays  in 
city  stock,  236-7;  Nottingham 
secured  a  charter  to  keep  companies 
out,  supplied  current  and  owns  gas 
plant,  237;  Edinburgh  obtained  a 
charter,  delayed  supplying  current 
owning  gas  plant,  238;  Glasgow 
bought  out  a  "marauding"  com- 
pany, and  claimed  to  profit  by 
dilatoriness  in  extending,  238-40; 
municipal  policy  prevents  develop- 
ment of,  247 ;  the  United  Kingdom 
outstripped  by  United  States  in, 
259-62,  298-300;  task  of  estab- 
lishing the  industry  left  to  the 
United  States,  323 

Electric  Lighting  Act,  1882,  184-99; 
Board  of  Trade  misjudges  the 
situation,  185-6;  speeches  of  Mr. 
Chamberlain  on,  188-90,  194-5; 
opposition  to  long  franchises  for, 
190-2;  opposition  mainly  from 
gas  companies,  193;  Bill  amended, 
193-4;  charters  taken  out  under, 
revoked  and  development  checked, 
195;  "marauding"  companies  a 
result,  196-7 ;  attempts  to  liberalize 
the,  200-2 ;  three  Bills  referred  to  a 
Select  Committee,  202;  evidence 
given  before  Committee,  203-20; 
Act  of  1882  killed  the  industry, 
204,  209,  311 ;  testimony  of  town 
clerks  and  councillors,  212-8;  ef- 
fort to  amend,  abandoned,  220; 
Amendment  Bill,  1888,  passed, 
241;  aimed  to  remove  prohibitive 
restrictions,  241-2 ;  compulsory 
purchase  clause,  242;  aimed  to 
remove  prohibitive  restrictions,  242 ; 
provisions  of,  requiring  provisional 
consent,  should  be  amended,  246; 
one  law  for  local  authorities, 
another  for  companies,  257;  not 
amended,  291 

Electric  lighting  industry,  paralysis 
of  the,  59-60;    development  of  the, 


in  Great  Britain  and  the  United 
States,  204-5;  losses  in  experi- 
menting, 208;  no  necessity  for 
putting,  on  an  equality  with  gas, 
215-6;  progress  in,  not  worth  its 
cost,  218-20;  Report  of  Birming- 
ham Committee  on,  221-8;  para- 
lyzed in  Great  Britain  for  six  years, 
240 

Electric  lighting  plants,  municipali- 
ties having,  anxious  for  electric 
tramways,  41-3 

Electric  railway,  first,  from  Berlin  to 
Lichterfelde,  58 

Electric  railways,  heavy  losses  in 
developing,  64-7;  in  the  United 
Kingdom  and  the  United  States, 
301 ;  establishment  of,  left  to  the 
United  States,  323 

Electric  service  in  United  States  and 
Great  Britain,  261-2 

Electric  stations,  central,  in  United 
States,  63;  in  the  United  States 
and  Germany,  19779;  in  United 
States  and  in  United  Kingdom, 
259-62,  301-3 

Electric  supply  companies,  twenty- 
four,  authorized,  289-90 

Electric  tramways,  number  of,  in 
United  Kingdom,  58-9;  reasons 
for  failure  to  develop,  59-60;  in 
United  States,  59;  twenty-one- 
year  period  too  short,  60;  opposi- 
tion of  municipal  gas  plants,  61-2 

Electrical  engineering,  Great  Britain 
had  lead  in  earlier  stages  of,  4; 
behind  since  1870,  6 

Electrical  industries,  Committee  to 
report  on  legislative  policy  toward, 
80;  conference  of,  with  Mr. 
Balfour,  81-2;  Mr.  Balfour's 
explanation  of  the  Government's 
position,  82-5;  British  outstripped 
by  the  United  States,  298-300; 
other,  303-4 

Electrical  theory,  in  development  of, 
Great  Britain  has  held  her  own,  5 

Electricity  as  an  agent  for  the  trans- 
mission of  power,  305 

Electricity  Supply  Bill  introduced 
three  times  and  withdrawn,  290-5 ; 
argument  against,  on  second  read- 
ing, 295-6 

Electricity,  wholesale  supply  of,  pre- 
vented, 267-72 

Employees,  municipal,  307-21;  poli- 
tics and  wages  of,  308-n;  should 
be  disfranchised,   312-4;    increase 


886 


INDEX 


of   wages   of,  in    London,  316-7; 
lack  of  material  on,  318 
Engineering    trades,     Great    Britain 
second  to  no  other  country  in,  3 

Falshaw,  Sir  James,  against  steam 
tramways  in  Edinburgh,   133-4 

Faraday,  made  fundamental  dis- 
coveries in  electro-magnetism,  4 

Fares,  provisions  for  revision  of, 
33~4>  graded,  in  Glasgow,  103-16: 
decentralization  not  accomplished 
by,  107;  give  narrow  margin  of 
profit,  107-0;  benefit  wage  earners 
little,  in;  extension  of  i-cent 
stage  demanded,  1 10-12;  uniform, 
recommended  by  commission  on 
transportation  in  London,  168 

Farrer,  Mr.  T.  H.,  testimony  of, 
before  Committee  of  Commons, 
52-3;  compared  with  published 
returns,  54-5;  on  electric  lighting, 
185-6;  on  power  of  provisional 
veto,  243-4;  and  the  London 
Council,  318;  favored  municipali- 
ties;   feared  monopolies,  326-8 

Fleming,  T.  A.,  on  development  of 
electrical  industries,  5-6 

Forbes,  George,  on  electrical  de- 
velopment, 203-4 

Forbes,  J.  S.,  on  the  Board  of  Trade, 
206-8 

Franchises  should  be  sold  or  leased,  1. 

Galloway,  Mr.,  against  the  Lan- 
cashire Power  Bill,  280-1 

Garcke,  E.,  on  attitude  of  local 
authorities  toward  tramway  com- 
panies, 40-4;  on  English,  German, 
and  American  manufacturers  of 
electrical  apparatus  and  supplies, 
209-300 

Gas  companies,  sliding  scale  of  price 
and  dividend  for,  201-2 

Gas  plants,  municipal  purchases  of, 
172-83;  sales  of  plants  by  com- 
panies usually  compulsory,  175-82; 
profit  goes  to  municipality,  not  to 
consumers,  182;  in  the  United 
Kingdom,  262-3 

Glasgow,  Light  Railways  Commis- 
sioners disapprove  a  tramway  act, 
74;  street  railways  in,  93-102; 
assumes  operation  of  tramways, 
94;  partial  electrical  equipment, 
95;  opposes  perpetual  franchises 
except  for  itself,  95;  promises  of, 
contrasted    with    achievement,    97; 


fails  to  suburbanize  population, 
99-101,  107;  financial  results  in, 
101;  proves  that  graded  fares 
mean  congested  population,  103-16; 
committee  on  desirability  of  acquir- 
ing outlying  land  bordering  tram- 
ways, 1 14-5;  bought  electric  light 
plant  of  a  "marauding"  company, 
238;  gains  claimed  from  dilatori- 
ness  in  extending,  239-40;  politics 
and  wages  of  municipal  employees 
in,  308-1 1 
Grove,  Sir  William,  made  earliest 
electric  accumulator,  4 

Hall,  Sir  Benjamin,  moved  rejection 
of  Bill  for  street  railways  in  Lon- 
don, 7 

Harper,  E.  J.,  on  tramway  congestion 
in  London,  165-6 

Harrison,  Charles,  on  subways  in 
London,  169-71 

Hereford,  no  more  city  rate  in,  173-4. 

Hopkins,  Mr.,  on  cost  of  paving  to 
tramway  companies,  24;  testimony 
of,  regarding  demands  of  road  and 
local  authorities,  26-7;  on  use  of 
steam,  54 

Hopkinson,  Dr.  John,  worked  out 
design  of  dynamo  machinery,  4 

Horse  railways,  long-lived  charters 
of,  in  United  States,  63;  changed 
to  electric,  64-7;  close  of  the  era 
of,  in  United  States,  96;  task  of 
establishing,  left  to  the  United 
States,  323 

Hughes,  Sir  Thomas,  on  electric 
lighting  in  Liverpool,  233-4;  on 
danger  in  large  number  of  city 
employees,  313-4 

Hunter,  Robert,  on  Electric  Lighting 
Act,  1882,  197  n. 

Individual  freedom  of  action,  passion 
of  Americans  for,  330-1 

Industrial  development  due  to  in- 
dividual initiative,  330 

Intervention,  Minimum  of  govern- 
mental, a  key  to  our  industrial 
successes,  331 

Inventiveness,  British,  in  check  since 
1870.  4"S 

Lancashire  Power  Co.  Bill,  oppo- 
sition to,  278-83;  debate  on, 
280-3;  passed,  284;  extent  of 
area  covered  by,  284-5 

Land;,    outlying,    municipal    owner- 


INDEX 


337 


ship  of,  1 14-6;  settlement  of,  near 
London,  162-4 

Leeds,  street  railways  in,  138-9; 
rejected  electric  for  compressed 
air  and  hydraulic  power,  215-6; 
admitted  one  company  and  bought 
it  out  with  city  stock,  236-7 

Leigh,  E.  O,  on  purchases  of  gas 
plants  by  local  authorities,  179-82 

Light  Railways  Act,  Veto  power  of 
local  authorities  against  principles 
of,  47;  chapter  on,  68-85;  Pro~ 
visional  Orders  issued  under,  70; 
enables  promoters  to  evade  re- 
strictions of  Tramways  Act,  78; 
not  amended,  291 

Light  Railways  Commissioners,  rules 
governing  proceedings  of,  71-3; 
rulings  of,  in  Edinburgh,  Glasgow, 
Bradford,  and  other  places,  71-8. 

Liverpool,  statistics  of  tramways  in, 
113;  street  railways  in,  139; 
failure  of  local  authorities  to 
install  electric  lighting  plant,  232; 
private  company  plant  bought, 
233-4 

Local  authorities,  almost  invariably 
sell  their  assent  for  a  tramway, 
22,  27,  46;  difficult  to  make 
terms  with,  26;  undue  pressure  of, 
to  be  prevented,  31;  Mr.  Arthur 
Peel  on,  31;  veto  power  of,  not 
limited,  33,  44;  enforce  bargains 
with  promoters,  37-8 

London,  Greater,  street  railways  in, 
141-71;  local  interests  check  de- 
velopment of  tramways  in,  142-5; 
Parliamentary  committee  on  metro- 
politan tramways,  145-8;  recent 
opposition  to  tramways  by  private 
interests,  15 1-4;  misuse  of  veto 
power  by  boroughs  and  County 
Council,  154-7;  inadequacy  of 
tramway  service  in,  158-60;  over- 
crowding perpetuated,  161-2;  out- 
lying lands  near,  inaccessible, 
162-4;  more  tramways  needed, 
164-7;  public  necessity  versus 
municipal  gain,  169-71 

London,  Metropolitan,  charters  for 
street  railways  in,  refused,  7-9; 
three  schemes  for  street  railways 
in  suburbs  of,  sanctioned,  9-10 

Losses  in  development  of  new  indus- 
tries, 66,  323-4 

Lowther,  J.  W.,  on  blackmail  by 
local  authorities,  49-50 ;  on  twenty- 
one-year    franchises,    60;     on   the 


veto  power,  156;  on  electric  sup- 
ply in  Manchester,  235 
Lubbock,  Sir  John,  on  compulsory 
sale,  at  structural  value,  187;  on 
opposition  of  gas-making  corpora- 
tions to  charters  for  electric  light- 
ing, 248-9 

Macdona,  Mr.,  favored  Lancashire 
Power  Bill,  279-80 

Magden,  Mr.  W.  L.,  on  refusal  of 
local  authorities  to  consent  to 
Provisional  Orders  for  electric 
lighting  companies,  249-51;  or- 
ders obtained  for  blocking  pur- 
poses, 259 

Manchester,  street  railways  in,  136-8; 
established  electric  light  plant  to 
keep  out  six  companies,  234; 
profits  applied  to  reduction  of 
rates  (taxes),  235 

Manufactories,  decentralization  of, 
desirable,  305 

Manufacturer,  municipalities  versus 
the,  266-97 

Manufacturers  need  cheap  electrical 
power  from  central  stations,  276-7 

Monopoly,  claims  to,  prevented, 
266-7,  27° 

Morley,  Earl  of,  on  Standing  Order 
No.  22,  44-7 

Morris,  John,  speaks  before  com- 
mittee as  witness  of  tramway 
interests,  14 

Morrison,  Sir  G.,  on  electric  lighting, 
214-6 

Morse,  Mr.  Sydney,  on  local 
authorities,  oppression  of  tramway 
companies,  39-40;  on  difficulty 
of  obtaining  charters  for  electric 
lighting,  247-8 

Municipal  authorities,  granted  power 
to  lay  down  tramways  with  con- 
sent of  Board  of  Trade,  13-14; 
duties  and  responsibilities  of,  should 
be  increased,  17;  abuse  of  veto 
power  by,  22,  119 

Municipal  Corporations,  Association 
of,  political  pressure  exercised  by 
the,  70;  power  of  the,  78;  Gov- 
ernment afraid  to  antagonize,  79, 
220;  permitted  amendment  to 
Electric  Lighting  Act  of  1882, 
241-2 ;  defeated  the  General  Power 
Distribution  Bill,  271-2;  influence 
of,  in  the  Commons,  274,  328-9; 
opposed  to  Lancashire  Power  Co. 
Bill,  279 


888 


INDEX 


Municipal  opposition  to  progress, 
273-6 

Municipal  ownership,  of  outlying 
lands,  1 14-16;  experience  gained 
under,  in  Great  Britain,  not 
highly  valued,  203;  Report  of  Bir- 
mingham Committee,  1882,  221-8 

Municipal  public  service  industries 
should  share  their  profits  with  the 
public,  1,  16-18,  52;  effect  of 
application  of   this   doctrine,  91-2 

Municipal  trading,  51-3;  Joseph 
Chamberlain  a  champion  of,  62, 
130;  effects  of  advocating,  86; 
craze  for,  210;  on  difficulty  of 
obtaining  charters  from  the  Board 
of  Trade,  246-53 

Municipal  Trading,  Testimony  before 
Select  Committee  on,  38-44 

Municipal  undertakings,  financial 
weakness  of,  296-7;    costliness  of, 

3' 5-7 

Municipalities,  complete  failure  of,  to 
advance  new  industries,  21;  seek 
to  acquire  plants  of  flourishing  com- 
panies, 181,  186 

Municipalities  versus  consumer,  241 

Municipalities,  versus  the  manu- 
facturer, 266-97;  Parliament  help- 
less before  the,  290-5 

Municipalities,  versus  the  wage- 
earners,  298-306;  political  danger 
to,  from  municipal  employees, 
308-14;  brutal  disregard  of  pub- 
lic welfare,  324-5 

Municipality  should  own  and  conduct 
public  service  industries,  1,  16-18 

Munro,  Mr.,  on  conditions  in  Glas- 
gow, 98 

Murphy,  W.  M.,  proposes  system  of 
electric  traction  for  Dublin,  96-7 

Newton,  William,  on  jurisdiction  of 
local  and  road  authorities  in  grant- 
ing tramway  lines,  23,  144;  on 
tramways  in  crowded  streets,    145 

Nottingham  worried  gas  company  into 
selling  out,  176;  obtained  electric 
light  charter  to  keep  companies 
out,  237;    owns  gas  plant,  237 

O'Connor,  T.  P.,  argument  of,  against 

tramcars,  152 
Omnibus,    motor,    used   to   displace 

tramways,  149-50 

Parliament  helpless  before  the  mu- 
nicipalities, 290-5 


Parliament  influenced  more  by  the 
municipal  corporations  than  by  the 
builders  of  tramways,  15-16 

Parrish,  D.,  experience  of,  with  road 
and  local  authorities,  26 

Paterson,  D.  W.,  testifies  that  Edin- 
burgh Tramway  Co.  had  to  con- 
ciliate corporation,  119,  121 

Paving,  amount  of,  to  be  done  by 
tramways  fixed  by  Act  of  1870,  23; 
amount  demanded  by  local  au- 
thorities in  Metropolitan  London, 
24 

Peel,  Arthur,  on  steam  power,  29-30; 
opinion  of,  local  authorities  should 
make  contracts  with  promoters  of 
steam  tramways,  31-3 

Pickersgill,  Mr.,  opposes  monopolist 
companies,  274-5 

Politicians  handicapped  in  doing 
their  work,  322-3 

Population,  tramways  to  decen- 
tralize, 56;  graded  fares  mean  a 
congested,  103;  decentralization  of , 
in  American  cities,  108;  congestion 
of,  in  Birmingham,  133-4;  over- 
crowding of,  in  London,  perpetu- 
ated, 1 61-2;  decentralization  of, 
by  subways,  166-8 

Power  Distribution  Bill,  the  General, 
268-71 ;  supported  by  Chambers  of 
Commerce,  270-1;  debate  on  the, 
271-6;  a  direct  attack  on  municipal 
corporations,  275-6;  cost  of,  to  the 
promoters,  277;  revived  in  1901, 
285-6 

Preece,  W.  H.,  on  electrical  develop- 
ment, 204-5 

Prejudice,  the  appeal  to,  280-3 

Private  initiative,  conditions  which 
destroyed,  27-8 

Profits,  shares  of,  demanded  by  local 
authorities,  34-5 

Progress,  dependent  upon  freedom, 
323-4!  governmental  obstruction 
to,  325-9;  industrial,  due  to  in- 
dividual initiative,  330-1 

Promoters,  private  bargains  between 
local  authorities  and,  36-7;  local 
authorities  have  means  of  enforc- 
ing, 37-8;  "we  should  bleed  them," 
40;  regard  conditions  often  as 
blackmail,  49;  willing  to  face 
risks  on  long-lived  franchises,  67; 
result  of  a  bargain,  72-3;  de- 
mands of  Edinburgh  upon,  n  9-21 ; 
on  difficulty  of  obtaining  charters, 
347-53 


INDEX 


339 


Provisional  Orders,  granted  by  Board 
of  Trade  with  consent  of  local 
authorities,  22-3;  conditions  de- 
manded for  consent  for,  24-7; 
provisions  in,  for  use  of  mechanical 
power,  33;  conditions  named  by 
different  local  authorities,  34-7; 
provisions  disallowed  made  sub- 
ject of  private  bargains,  36-7;  use 
to  be  made  of,  244;  refused  to 
electric  companies  where  corpora- 
tions owned  gas  enterprises,  248-53 ; 
discrimination  in  favor  of  local 
applicants,  253;  may  be  revoked 
on  failure  to  supply  current,  255; 
issued  to  local  authorities  with  no 
supply  available,  256;  taken  out 
by  local  authorities  to  reserve  field 
for  municipal  plants,  258 

Provisional  Orders  of  Light  Railway 
Commissioners,      Regulations      of, 

7°~3 

Public  authorities  more  solicitous  for 
welfare  of  the  people  than  trading 
companies,  2 

Public  service  industries,  doctrine 
concerning,  in  Great  Britain,  2; 
special  value  of  Great  Britain's 
experiments  with,  2-6;  paralyzing 
effects  of  the  doctrine,  322-3;  its 
cost  to  the  nation,  326 

Purchase  clause,  under  Acts  of  1869, 
Mr.  Shaw-Lefevre  on,  13;  tram- 
ways acquired  by  municipalities 
under,  of  Tramways  Act  of  1870, 
20;  of  1882,  62 

Purchase  clause  demanded  in  charters 
for  subways,  169-70 

Purchase  clauses  in  charters  for  street 
railways,  13-6 

Ritchie,  Mr.  C.  P.,  against  the  Gen- 
eral Power  Distribution  Bill,  275-6; 
on  the  Lancashire  Power  Bill,  280, 
283-4 

Road  authorities  exacting  as  to  terms, 
23;   difficult  to  deal  with,  26-7 

Salisbury,  Marquess  of,  on  terms 
offered  electric  companies,  193 

Shaw-Lefevre,  Mr.,  remarks  of, 
introducing  Tramways  Bill,  1870, 
n-14 

Sheffield,  street  railways  in,  139-40; 
admitted  one  electric  light  com- 
pany and  bought  it  out,  235-6 

Shoolbred,  J.  N.,  on  the  electric 
fight,  205HS 


Slag,  Mr.,  on  Electric  Lighting  Act, 
1882,  190-2 

Smith,  E.  O.,  on  electric  lighting, 
212-4,  228;  on  disfranchisement 
of  corporate  employees,  312-3 

Southern,  Mr.  J.  W.,  on  disfranchise- 
ment    of     municipal     employees, 

3*4-5 

Standing  Order  No.  22,  results  of, 
44-6;  Earl  of  Morley  advocates 
amendment  of,  45-7;  impeded  the 
housing  of  the  working  classes,  48; 
amendment  to,  moved,  48;  dis- 
cussed and  withdrawn,  49-5 1 ; 
amended,  60 

Steam  or  other  mechanical  power, 
applications  to  use,  on  tramways, 
refused,  27-8;  Government  un- 
willing to  offend  the  opposing 
interests,  28;  Committee  of  House 
of  Commons  to  consider,  28;  re- 
ported favorably  on  experimental 
use  of,  29,  30;  clause  rejected  by 
House  of  Lords,  30;  principles  to 
govern  use  of,  30—1 ;  period  of  con- 
tract for,  seven  years,  3 1 ;  provisions 
for  use  of,  in  Provisional  Orders,  33 ; 
economy  of  steam  power,  56-7; 
steam  tramways,  experiments  with, 
in   Edinburgh,  123 

Street  railway  franchises,  municipal 
trading  in,  51 

Street  railways,  request  for  a  charter 
for,  in  London,  denied,  7 ;  attempts 
to  build  in  the  sixties,  8-9;  general 
act  for  granting  charters  for,  en- 
acted, 10;  built  on  the  Continent, 
10;  success  of  the  latter,  12;  pur- 
chase clauses  in  charters  for,  13; 
should  be  purchased  by  the  munic- 
ipality, 18;  building  of,  paralyzed, 
18-21;  comparison  of,  with  those 
of  the  United  States,  18-20;  built 
only  by  municipalities  under  Act  of 
1870,  20;  municipalities  refused 
power  to  operate,  2 1 ;  local  au- 
thorities sell  assent  for,  22,  27,  46; 
burdens  placed  on,  ^3'y  ne*  earn- 
ings of  tramways  of  United  King- 
dom, 51;  should  be  encouraged, 
55 ;  in  United  Kingdom  and  United 
States,  87-9;  comparison  of  track- 
age and  population  in,  89;  com- 
parison of  track  mileage  in,  90-1; 
objections  to  extending,  116 

Street  railways  of  Massachusetts, 
comparative  results  of  horse  and 
electric  power  on,  65 


340 


INDEX 


Streets,  belong  to  the  public  at  large, 
a;  of  London,  too  narrow  to 
allow  of  tramways,  7;  recognized 
control  of,  in  danger,   269-70 

Subways  for  electric  railways  recom- 
mended by  Commission  on  trans- 
portation in  London,  166-8;  op- 
position to,  from  London  County 
Council,  169-71 

Swan,  J.  W.,  made  earliest  incan- 
descent lamp,  4,  6 

Swinburne,  Mr.,  on  removal  of 
restrictions  on  electrical  industry, 
81-2 

Swinton,  Mr.  A.  A.  C,  on  way  Board 
of  Trade  plays  into  hands  of  local 
authorities,  251-2;  on  influence  of 
owners  of  gas  plants,  259 

Telephone  exchanges,  in  the  United 
States  and  the  United  Kingdom, 
301-3;  task  of  establishing,  left  to 
the  United  States,  323 

Train,  George  Francis,  builds  tram- 
ways in  London,  8-9 

Tramways,  British,  cable  system  not 
used  on,  57 

Tramways,  declared  a  public  benefit 
by  a  jury,  8;  Bill  for,  on  turnpike 
roads  brought  in,  9;  opinion  of 
Select  Committee  of  1869  on,  11; 
initiative  in  building,  repressed  by 
Light  Railways  Act,  69,  86;  local 
authorities  authorized  to  purchase, 
79-80;  construction  of,  hindered  by 
demands  of  corporations,  11 9-21; 
building  of,  in  Birmingham  dis- 
couraged, 132-3;  checked  by  veto 
power,  157 

Tramways  Act,  the,  of  1870,  7-67; 
remarks  of  Mr.  Shaw-Lefevre  on 
introducing,  11-14;  leaves  control 
with  the  municipalities,  16;    para- 


lyzed private  initiative,  21-8;  mo- 
tive power  under,  27;  paralyzing 
effect  of,  60;  twenty-one  year 
compulsory  sales  clause  in,  62; 
overridden  in  Birmingham,  131; 
not  amended,  201 
Tramways  of  Edinburgh  under 
private  management  favor  working 
classes,  118 

United  Kingdom,  lack  of  street  rail- 
ways in,  87-91 

Urban  District  Councils,  Association 
of,  70-1 

lire,  Sir  John,  on  political  power  of 
municipal  employees  in  Glasgow, 
309-11 

Vernon-Harcourt,  Sir  W.,  on  great 
enterprises  in  private  hands,  282-3 

Veto  power,  abuse  of,  by  municipali- 
ties, 22-7,  119,  154-75  failure  of 
attempts  to  limit,  28,  32  >  extended 
to  private  charters,  44;  repeal  of 
the,  opposed,  50;  abolition  of,  ad- 
vocated, 156-7;    provisional,  242-6 

Wage-earners,  municipalities  versus 
the,  298-306;  loss  of  employment 
to,  300-4;    indirect  harm  to,  304-6 

Wolverhampton,  action  of,  regarding 
electric  tramways,  43 

Wood,  Dr.,  on  opposition  of  Edin- 
burgh authorities  to  tramway  com- 
pany, 1 20-1 

Wortley,  Stuart,  opposes  General 
Power  Distribution  Bill,  272-3 

Wyatt,  R.  H.,  on  system  of  granting 
tramways,  25 

Yorkshire  Electric  Power  Co.,  286-8 
Young,  John,  on  results  of  system  of 
graded  fares,  104-7,  "0-11 


'D  W  *7 

9. 


Date  Due 

Vi 

-II 

11 

Library  Bureai 

Cat.  No.  1137 

